The timing for style switching in A-shares is just right: coal, consumption, and banking sectors are taking turns to explode, who will be next?

The A-share market is currently witnessing a dramatic scene of "elephants dancing" and sector rotation, with changes in capital flow indicating that the market style may have reached a critical turning point.

Currently, funds in the A-share market are shifting from the previously popular technology growth sectors to traditional blue-chip stocks with lower valuations and stable dividends, with sectors such as coal, consumer goods, and banking recently experiencing explosive growth.

The latest market dynamics highlight this change. On the morning of November 12, the market showed significant differentiation; despite over 3,800 stocks declining, the top 18 companies by market capitalization, represented by Agricultural Bank of China, collectively surged, driving major indices into the green. Among them, the stock price of Agricultural Bank of China rose by 3% at one point, reaching a new historical high with a market capitalization exceeding 3 trillion yuan.

Midea Group, China Petroleum, and Bank of China all rose by 2%. Major stocks such as Ping An Insurance, China Life, Industrial and Commercial Bank of China, and Postal Savings Bank also performed strongly.

According to market data, southbound funds saw significant net inflows last week (from November 3 to 7), with banking, non-banking financial, and oil and petrochemical industries being the main targets, totaling a net inflow of approximately 18.4 billion yuan. This indicates that, against the backdrop of changing market risk preferences, investors are once again favoring traditional large-cap assets.

Behind this rotation, is the market's rebalancing towards "certainty" and "high elasticity." Several brokerage research reports point out that the current market is shifting from chasing the "future narrative" of technology stocks to exploring the "valuation trough" of traditional sectors, and the style switch has arrived as expected. Some analysts believe that the bull market will smooth out every "trough," and this round of market led by the "old forces" is expected to continue through the fourth quarter.

"Seesaw Pattern": Rotation of Dividends and Growth

Since 2025, the A-share market has shown a distinct characteristic, namely the opposition and rotation between the two styles of "dividends" and "technology growth."

According to a research report released by CITIC Construction Investment Securities, "A core feature of the A-share market since 2025 is the significant differentiation and rapid rotation between the two styles of 'dividends' and 'technology growth,' forming a 'seesaw pattern.'"

The report further explains the internal logic of this phenomenon: when "external environmental uncertainties rise, funds flow into stable cash flow and high-dividend dividend sectors to seek 'current certainty'"; while when "market risk preferences warm up, funds quickly shift back to the technology growth track to seek 'future high elasticity.'"

The strong performance of large-cap blue-chip stocks recently is a direct reflection of the market seeking "certainty" in the current environment.

"Old Forces" Rising: Brokerages Favor Value Troughs

With the shift in market style, many institutions are turning their attention to previously underweighted traditional sectors. In a strategy report dated November 10, Pacific Securities clearly pointed out:

"Dividends lead the index, consumer goods lead the industry, and the style switch of new and old is arriving as expected. The 'old' forces we have continuously recommended are expected to outperform throughout the entire fourth quarter." The report believes that the continued rise of the technology sector requires profits to confirm it, while traditional sectors offer more attractive valuations. The report states:

“The continued rise of narrative sectors such as technology is expected to require upward confirmation from profits, while previously underweighted sectors such as non-ferrous metals, coal, photovoltaics, banking, nuclear power, consumption, and chemicals remain at low levels; the bull market will smooth out every 'low point'.”

CITIC Securities also expressed optimism about large-cap styles in its outlook, believing that industries such as coal and photovoltaics have good allocation value.

The Logic of "Buying Well": High Dividends and Margin of Safety

The core of this round of style switching is that investor logic has shifted from simply pursuing high growth with "buying well" to considering valuation cost-effectiveness with "buying well."

Guosen Securities cited research by investment master Jeremy J. Siegel in a report, pointing out that high growth does not necessarily lead to high returns, and excessively high valuations may erode long-term gains.

This logic is validated in the banking sector. CITIC Construction Investment Securities believes that under the backdrop of a weak macroeconomic recovery, "high dividend strategies continue to play out." For allocation-type funds, "the demand for allocation with a bottom-line mindset, high confidence, and high win rates further enhances the margin of safety." Therefore, the institution continues to favor high dividend yield strategies and recommends state-owned large banks and some regional banks with stable dividends and valuation advantages.

This indicates that in an uncertain environment, assets with robust fundamentals and valuation cushions are becoming the "favorites" of funds