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■ Yang Delong
The Party Committee of the People's Bank of China recently held an expanded meeting, which called for the continued implementation of a moderately loose monetary policy, firmly maintaining the stable operation of financial markets such as stocks, bonds, and foreign exchange, and studying the establishment of a liquidity support mechanism for non-bank financial institutions under specific scenarios. The release of favorable policies provides support for the healthy and stable operation of the A-share market.
Recently, I proposed two major investment themes for this year: technology and resources. As a resource category, the prices of non-ferrous metals have seen significant increases over the past year. The prices of industrial metals such as copper, aluminum, and zinc, as well as minor metals like tungsten, lithium, and cobalt, have all risen significantly. The development of artificial intelligence requires a large amount of copper, and the construction of big data centers relies heavily on copper wiring. The copper usage in new energy vehicles is about four times that of traditional fuel vehicles. Therefore, the demand for non-ferrous metals remains at a high level.
Due to the significant price increases in the earlier period, coupled with the escalation of conflicts in the Middle East that heightened market risk aversion, investors' risk appetite has decreased. Non-ferrous metals are typical high-elasticity varieties, experiencing large increases during upward phases and are also prone to concentrated selling during downward phases. In the short term, the non-ferrous metal sector is overall in an adjustment period, with funds shifting towards &#34;HALO&#34; assets, namely sectors with heavy assets and low elimination rates, such as electricity, power grid equipment, and railways. These traditional blue-chip stocks have relatively low valuations, high dividend rates, and are not easily replaced by artificial intelligence.
Many people are concerned that the hard-won slow bull and long bull markets might be interrupted by the geopolitical conflicts in the Middle East. I believe this will not happen. This conflict may bring short-term pain to the market, but it is not enough to end this bull market.
The current slow bull and long bull markets are supported by deep logical foundations, including strong policy support for the capital market, the transfer of household savings to the capital market, and the attraction of foreign investment into undervalued Chinese assets due to China's technological innovation. These fundamental factors have not fundamentally changed. Therefore, the fluctuations in the A-share market caused by the geopolitical conflicts in the Middle East should be viewed as short-term shocks rather than long-term influencing factors.
I believe that the current slow bull and long bull markets carry three missions: first, to boost consumption; second, to stabilize the real estate market; and third, to strongly support technological innovation. There are still opportunities in this market, but sector rotation will accelerate, and the difficulty of investment will correspondingly increase. However, the direction of technological innovation is the true beneficiary area of China's economic transformation. The technology innovation industries mentioned in the government work report are all key support directions in the &#34;14th Five-Year Plan.&#34; These directions are likely to span the entire bull market cycle rather than being short-term opportunities. Therefore, after adjustments, some funds will be attracted to gradually position themselves.
Last year, technology stocks were characterized by sector effects. For example, when the robotics sector rose, other sectors associated with the robotics concept also strengthened simultaneously, as it was difficult for everyone to accurately judge which companies truly had leading potential. This year, the market is gradually entering a &#34;trading orders&#34; phase. Companies that receive orders from leading companies like Tesla and Yush Robot are likely to attract capital, and their stock prices may rise significantly. Companies that consistently fail to secure orders may be disproven, and their stock prices may decline. Next year may enter a performance verification phase, which will determine whether a technology company's orders can ultimately be converted into actual performance growth. Other sub-sectors of technology will also undergo a similar process of order release and performance verification
The growth in demand for non-ferrous metals (artificial intelligence + new energy vehicles), combined with the liquidity easing brought about by the Federal Reserve's interest rate cuts, constitutes a medium to long-term logic that has not fundamentally changed. However, under the pressure of profit-taking, short-term adjustments may continue. Some risk-averse funds will switch between high and low positions, laying out traditional blue-chip stocks at low levels.
The rotation of sectors is essential for a healthy bull market. If a single sector continues to rise while others do not for an extended period, the bull market will not be sustainable. When sectors rotate, the market operates more healthily, and the bull market can go further.
This year, the market will present a &#34;new dumbbell&#34; trend: one end favored by high-risk appetite funds with high elasticity, such as technology and non-ferrous metals; the other end favored by funds seeking stable returns, characterized by low valuations and high dividends in blue-chip stocks. For risk-averse funds, some quality blue-chip stocks are still valued close to the 2600-point level in the current market environment. From a long-term allocation perspective, focusing on these assets may have certain attractiveness, with a potentially favorable risk-return ratio. However, investing in these varieties requires patience, as the expectation for the sustainability of blue-chip stock price increases may further strengthen with the inflow of more low-risk appetite funds.
According to market estimates, approximately 50 trillion yuan of time deposits will mature this year, mostly three-year products with interest rates above 3% from three years ago. Upon maturity, the interest rate drops to around 1.2%. Some investors choose to continue renewing their deposits, accepting lower interest rates; others are moving funds out to invest in bonds or equity assets, sharing in the slow bull market's results through stocks and funds. Some funds may enter the capital market by purchasing stocks or funds, becoming incremental funds for the market. The shift of household savings to the capital market has already begun, albeit slowly. Unlike the massive daily transfers of savings into the capital market during a bull market, this slow migration of savings aligns with the characteristics of a slow bull and long bull market. Therefore, this round of market conditions is supported by sustained funds, with the core characteristics of a slow bull market being &#34;slow&#34; and &#34;long-lasting.&#34;
Investors need to remain patient and conduct in-depth research on which industries and companies truly benefit from economic transformation and which companies may bring excess returns in the future. At this time, adhering to the principles of value investing and returning to fundamental research is particularly important.
Editor | Chen Yuhe
Reviewer | Wang Wei

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Yang Delong believes that the geopolitical conflicts in the Middle East will not affect the slow bull and long bull market of A-shares. The People's Bank of China continues to implement a moderately loose monetary policy to support the stability of the financial market. Although there is high demand for non-ferrous metals, the sector faces adjustments in the short term due to rising market risk aversion. Overall, the slow bull and long bull market still have deep logical support from policy support, the transfer of household savings, and attracting foreign investment through technological innovation, and it is expected to continue to drive consumption, stabilize the real estate market, and support technological innovation

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Yang Delong: The Middle East geopolitical conflict does not change the logic of the slow bull and long bull in A-shares