The market has recently shown a gradual upward trend, becoming less reactive to the impacts of Middle East conflicts. The conflict in March caused short-term volatility, pushing the Shanghai Composite Index close to 3,800 points and shaking investor confidence. During the market's most pessimistic period, I clearly stated that any dip below 4,000 points represents a 'bull market pullback,' emphasizing that such temporary adjustments offer opportunities to invest in high-quality stocks and funds. I believe the Middle East conflict only affects short-term performance and causes temporary declines but does not alter the overarching trend of the current slow and prolonged bull market. In a live broadcast with Professor Liu Jipeng titled "Defending 4,000 Points: Bull Pullback or Bear Arrival?", we expressed a clear view: this is a bull market pullback, and the overall market direction remains upward. We advised investors to maintain confidence and patience, positioning in quality stocks to capitalize on market opportunities. As expected, by April, following the announcement of the end of the Iran war, the market rallied, surpassing 4,000 points and approaching 4,100. The ChiNext Index led the gains, hitting an 11-year high, with improving profitability across the market.

From a sector perspective, 'technology and heavy assets' have emerged as two dominant investment themes, now increasingly evident. Technology represents sectors benefiting from economic transformation and the AI era, while heavy assets refer to AI infrastructure, including non-ferrous metals, petrochemicals, coal, power, and grid equipment, essentially covering energy and resource stocks. The technology sector encompasses areas highlighted in the '15th Five-Year Plan,' such as chips and semiconductors, artificial intelligence, AI applications, computing power and algorithms, humanoid robots, commercial aerospace, solid-state batteries, and biomedicine. These industries are strongly supported by policies, and as 2026 marks the start of the '15th Five-Year Plan' period, they are poised to be key market leaders.

Recently, Beijing hosted a half-marathon for humanoid robots, with performances from various robotics companies showing significant improvement compared to the previous year. The winner was a dark horse—Honor Robot swept the top three positions, including a cross-robot champion. This event provided a positive boost to the robotics sector, potentially triggering a rebound. Additionally, Yushu Technology, which appeared twice on the Spring Festival Gala, has announced its application for listing on the STAR Market, which may soon lead to an IPO, acting as another catalyst for the sector. Another catalyst is the upcoming release of the new Optimus V3 by Tesla's robotics division under Elon Musk. Currently, the robotics sector is in a phase of bottom consolidation and rebound, not yet entering a major uptrend. The commercial aerospace sector has also performed well recently. SpaceX is expected to go public in May, with a potential market capitalization of $1.5 trillion, which could boost the commercial aerospace sector globally, as many of its suppliers are based in China.

Sectors like energy storage and lithium batteries possess both technological and heavy-asset characteristics, making them hybrid categories. The new energy strategy has been one of China's most successful initiatives over the past decade, significantly reducing reliance on traditional energy sources like oil and coal through the adoption of new energy. The share of photovoltaic and wind power in China's energy mix has risen substantially, while the proportion of thermal and nuclear power has dropped from 70% five years ago to below 50%. This explains why the recent Middle East conflict-driven oil price surge had limited impact on China's energy supply. By proactively developing new energy alternatives, China has reduced its dependence on imported oil, demonstrating the success of its energy strategy. Continued focus on new energy remains a critical direction for the future.

Energy storage applications are extensive, powering robots, electric vehicles, and the low-altitude economy, all requiring动力 batteries. Among non-ferrous metals, prices for minor metals like lithium, cobalt, and nickel continue to rise due to tight supply and robust demand. The upward trend remains intact, making non-ferrous metals a key sector to watch this year. Copper, rare earths, and precious metals like gold and silver maintain high景气度. International gold prices recently breached $5,000 per ounce before correcting due to profit-taking and sales by central banks like Turkey's. Such corrections may present buying opportunities, as de-dollarization is a long-term trend. Since the collapse of the Bretton Woods system, the increasing supply of U.S. dollars has driven up gold prices denominated in dollars, potentially offering strong returns for investors in gold and silver. Therefore, allocations to these metals should be viewed as part of a broad asset strategy rather than focusing on short-term price fluctuations. While short-term moves are unpredictable, long-term trends are discernible. The U.S. government's debt has surpassed $39 trillion, with annual interest payments reaching $1.1 trillion, accounting for 20% of fiscal revenue. Many institutions and central banks are selling U.S. Treasuries in favor of physical gold, reflecting a structural shift. Thus, the long-term upward trend for international gold prices remains unchanged.

U.S. stocks have recently hit new record highs, especially after the announcement ending the Iran war, boosting investor optimism. However, this rally has exacerbated AI-related tech bubbles, raising risks of a significant correction. Warren Buffett has reduced his U.S. stock holdings to below 50% over the past two years, wary of potential tech bubble bursts, consistent with his historical approach. Having attended the Berkshire Hathaway annual meeting in Omaha seven times over the past decade, I have introduced Buffett's value investing philosophy to domestic investors. This May, I will again attend the meeting and visit Wall Street institutions to gather latest insights. While Buffett's value investing principles are key to long-term success, their application in the A-share market requires adaptation to local conditions. My theory of value investing with Chinese characteristics has gained traction among institutional and retail investors. Only by adopting this tailored approach can investors effectively combine value investing with China's market realities to identify opportunities and achieve sound returns. Investors should avoid chasing trends and frequent trading, embracing value investing instead.