CITIC Securities: A-share market breadth expected to expand in 2027, non-AI sectors present structural recovery opportunities

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On November 3, CITIC Securities' 2027 Capital Market Strategy Conference was held in Wuhan, where several chief analysts released their latest views on current hot topics in the market. Regarding the A-share market, CITIC Securities stated that the breadth of the 2027 A-share market rally is expected to expand, and non-AI sectors present broad opportunities for structural repair; it recommends positioning around mainlines such as steady returns, outstanding overseas-expanding manufacturing, and domestic demand recovery.

At the main forum in the morning, Zou Yingguang, Party Secretary and Chairman of CITIC Securities, delivered opening remarks. This was Zou Yingguang's first public speech since taking office as Chairman of CITIC Securities. Zou Yingguang stated that current global economic growth momentum shows a "dual concentration": by industry, economic growth is increasingly dependent on high-tech sectors such as AI; by country, growth contributions are further concentrating in a small number of economies such as China and the United States. Amplified by capital behavior, these characteristics have led to a stark divergence between hot and cold in global stock markets.

Zou Yingguang believes that, as things stand, the divergence in capital markets is narrowing: first, excessively high expectations in the tech narrative are being corrected, and sectors that rose too much earlier are digesting valuations; second, capital is returning to fundamentals, with the market paying more attention to technology, orders and cash flow; third, artificial intelligence is moving from the cloud to the device side, with smart terminals, intelligent driving and embodied intelligence accelerating into reality, and the industry logic is spilling over from a few leading companies to longer industrial chains and more enterprises.

"After the hot-and-cold divergence in global capital markets gradually narrows, China's economic fundamentals have shown very strong resilience. The completeness of our system brought by upstream and downstream manufacturing support and cluster-based development is the ballast for China to cope with external uncertainties, and also provides fundamental support for Chinese assets," Zou Yingguang said.

Ming Ming, Chief Economist of CITIC Securities, offered his assessment of the 2027 macroeconomy. He expects China's GDP to achieve growth of around 4.5% next year, with the economy continuing structural divergence but with the degree of divergence converging, investment and consumption recovering marginally, and new quality productive forces continuing to gain momentum.

Ming Ming judges that fiscal policy will remain proactive in 2027, fiscal spending is expected to accelerate from the fourth quarter of this year to early next year, and the deficit ratio is expected to continue at the 4% level next year; monetary policy will still focus on framework reform, and after the policy interest rate anchor switch is implemented, strengthening the transmission of policy interest rates will be an important part.

On major asset allocation, Ming Ming judges that next year Federal Reserve rate hikes may disturb global equity market performance; for commodities, more attention should be paid to varieties with a clear tightening trend in supply, such as non-ferrous metals; demand for bond allocation remains high; the RMB exchange rate is expected to appreciate moderately, and the process of RMB internationalization is expected to accelerate during the "15th Five-Year Plan" period.

Regarding the A-share market, Bao Chengchao, Chief Strategist of CITIC Securities, said bluntly: there is no reason to remain pessimistic about non-AI sectors, and non-AI sectors are expected to usher in a turnaround in 2027.

On the one hand, the AI industry trend is still upward, but uncertainty is increasing in the pace of investment and application scenarios, with the main focus on new AI technologies and new applications; on the other hand, potential improvement factors for non-AI sectors are increasing, including the possibility that overseas high interest rates may ease and that exchange losses are also expected to decrease year on year. In addition, valuations in some non-AI sectors (home appliances, consumer electronics, textiles and apparel, medical devices, etc.) have all fallen to historical extremes, and any better-than-expected improvement in macro factors could bring sufficient return elasticity.

Steady returns take improved supply patterns and sustainable capital returns as the starting point, with positioning around directions such as energy and chemicals, oil shipping, highways, logistics, white goods, pharmacies, insurance, overseas-expanding securities firms, and leading real estate developers with sound finances.

For outstanding overseas-expanding enterprises, focus on directions such as ships, diesel engines, two-wheelers, CXO, power tools, and power equipment, seizing opportunities brought by slower RMB appreciation, improved overseas demand, and rising global share of Chinese enterprises.

Regarding domestic demand recovery, if there are better-than-expected policy changes, varieties suitable for offense include catering supply chains, airport duty-free, health products and leading medical device companies, with preference for enterprises able to capture demand improvement and increase market share.

(Source: Shanghai Securities News) Body middle Embedded advertisement