Huatai Securities: External conflicts and holiday effects may suppress risk appetite; focus on subsequent shift towards profit anchors

Why has cost pass-through capability become the core of market dynamics?

Huatai Securities’ strategy report states that this week, the geopolitical situation is intertwined with global liquidity tightening expectations, leading to extremely cautious trading sentiment in the market. Against the backdrop of changing macro pricing logic, the micro-level competition in the market has intensified, with funds beginning to seek certainty amid energy shocks (such as lithium batteries, etc.). However, it should be noted that in a shrinking market environment, the sustainability of a single sector’s rise is under test, thus the core focus of the competitive direction lies in the “cost pass-through” capability within the industrial chain. Looking ahead, the current weak balance is about to face multiple windows of challenge. In the future outlook, there are external variables from geopolitical factors and internal pressure from the “pre-holiday effect,” which may affect trading activity. However, from a cross-month perspective, as April approaches, which is a period of concentrated earnings disclosures for A-shares, the market’s pricing anchor is expected to gradually penetrate emotional disturbances and return to fundamental validation. In terms of allocation, it is advisable to moderately pay attention to coal, power chains, and chemical raw materials that could benefit from high oil prices and possess pass-through capability, while using low-tier essential consumption as a base.