Investing in stocks requires consulting the Golden Kylin Analyst Research Reports for authoritative, professional, timely, and comprehensive insights to help uncover potential thematic opportunities! Based on dimensions such as industry balance, performance delivery, valuation safety, and industry景气度, Securities Times · Data Bao has identified 26 potential stocks for 2026. This list includes 6 pro-cyclical stocks, 5 AI and technology innovation stocks, 5 undervalued high-dividend stocks, 5 domestic demand recovery stocks, and 5 overseas expansion chain stocks. These selected stocks are expected to show positive performance trends.

In 2025, the A-share market exhibited prominent structural trends: small and micro-cap stocks led gains early in the year, fueled by the DeepSeek concept. Starting in June, a dual engine of technology and industrial policy drove the market to accelerate its upward trajectory. In the fourth quarter, high-dividend sectors like banks and insurance provided momentum, effectively supporting the market's stable operation. Major broad-based indices generally rose over 18% in 2025. At the Shenwan primary industry level, 29 sectors advanced while only 2 declined, presenting a broad-based rally.

Looking ahead to 2026, a profit-driven slow bull market in A-shares remains highly anticipated. Brokerage annual strategies largely converge on a core consensus of "oscillating strength and structural balance." Combinations of景气成长 (high-growth景气 sectors) and dividends—such as AI technology innovation, high-end manufacturing going global, pro-cyclical sectors, undervalued dividends, and domestic demand recovery—are widely endorsed.

Data Bao has meticulously selected these 26 potential targets for 2026 based on industry balance, performance delivery, valuation safety, and景气度.

Institutions are broadly optimistic about the 2026 A-share market outlook. A review of the 2025 institutional annual strategies is insightful. In the Securities Times article "Top 20 Potential Stocks for 2025 Released," the views of most brokerages were validated, with mergers and acquisitions, technological growth, and undervalued dividends becoming the main themes of the year's market performance. The selected 20 potential stocks generally delivered impressive market returns, averaging a gain of over 32%, significantly outperforming the Shanghai Composite Index during the same period. Stocks like Aerospace Engineering, Aerospace Science and Technology, and GigaDevice Semiconductor achieved gains exceeding 100%, while others like Photoelectric Co., Ltd., Hengtong Optic-Electric Co., Ltd., and Nanshan Aluminium Co., Ltd. rose over 40%.

Looking forward to 2026, most institutions remain bullish on the market. Industrial Securities explicitly stated in its report "Everything Competing for Growth – 2026 Market Outlook" that the market is expected to transition from a structural bull market dominated by the Technology, Media, and Telecommunications (TMT) sector to a more comprehensive bull market characterized by greater structural balance and synchronized advancement across various sectors. Industrial Securities elaborated on three key supports for the 2026 market: firstly, negative spillovers from overseas markets are expected to be limited; conversely, resonance with global AI industry trends, ample liquidity, and a weaker US dollar could buoy A-shares. Secondly, profit recovery may become the most significant highlight. Thirdly, positive shifts in fund flows are anticipated to develop more profoundly and form a positive feedback loop.

Furthermore, institutions like Yuekai Securities, Guosheng Securities, and Huachuang Securities expressed optimism for A-shares in their annual strategy reports. Others, including Guohai Securities, China Merchants Securities, and Yingda Securities, indicated in their annual outlooks that A-shares are poised for an upward trend, characterized by stability and improvement. Yuekai Securities stated that the core logic supporting A-shares' strength in 2026 remains solid, while external disruptive factors are gradually diminishing. The market is expected to embark on a long-term slow bull run, potentially exceeding the sustainability seen in most historical periods. Yuekai Securities further pointed out that the continued strength of A-shares is based on five main reasons: first, sustained macro-policy support is expected to improve economic fundamentals; second, industrial transformation is accelerating, with new growth drivers releasing more vitality and providing a continuous stream of quality targets and structural opportunities for the market; third, capital market reforms are deepening, leading to a comprehensive upgrade in market functions; fourth, continuous inflows of capital provide support for market gains; fifth, short-term overseas disruptions are gradually receding, which may boost market risk appetite.

Overseas investment banks are also optimistic about A-shares' performance in 2026. J.P. Morgan forecasts a target level of 5200 points for the CSI 300 Index by the end of 2026, representing an upside of approximately 12% from its closing level at the end of 2025. Fidelity International clearly stated that after a period of adjustment, a confluence of structural positive factors is gathering, suggesting that the Chinese market might be on the verge of a broader bull market. In its report "China Strategy: Ten Key Takeaways from 2025 Chinese Equities," Goldman Sachs mentioned that it expects the Chinese stock market to rise by 38% by the end of 2027. The primary growth drivers are anticipated to be earnings delivery and moderate valuation expansion. The market is currently transitioning from a "hope" phase to a "growth" phase, where profit realization is expected to gradually replace short-term valuation fluctuations as the core driver of returns.

A-shares' profits are accelerating upwards. Overall, factors including policy support, fundamentals, and liquidity conditions are favorable for the continued strong performance of the A-share market. From a fundamental perspective, a recovery in A-share profits is highly anticipated. Data shows that, based on institutional consensus forecasts, the net profit growth rates for the CSI 300 Index are projected to reach 9.18% and 9.23% for 2026 and 2027, respectively, indicating an accelerating trend. The ChiNext Index's net profit growth is forecast at 30.52% and 22.98% for 2026 and 2027, representing substantial growth. The STAR 50 Index's net profit growth is even more remarkable, projected at 88.46% and 33.54% for the same periods.

Industrial Securities noted that in 2026, with the continued rise in the overall Producer Price Index (PPI), the gross profit margins of non-financial listed companies in the entire A-share market are expected to stabilize and stop declining, thereby driving an overall profit recovery. Furthermore, historical patterns suggest that the first year of a five-year plan is often a strong period for cyclical sectors. Traditional cyclical sectors are expected to stage a more powerful rally, driven by the combined effects of price increases, "anti-involution" policies, and demand-side stimulus. Goldman Sachs offers more optimistic forecasts, predicting corporate profit growth of 14% and 12% for 2026 and 2027, respectively. From a liquidity perspective, Industrial Securities直言stated that "once the direction reverses, money is never a problem," indicating that incremental funds continue to flow steadily. Positive changes are evident in fund flows, including the reallocation of domestic household wealth towards equities, the return of alpha generation by active equity funds, the steadfast entry of long-term capital from insurers and national team funds, and the回流of foreign capital into Chinese assets. From a valuation standpoint, the current price-to-earnings (P/E) ratio and dividend yield of the CSI 300 Index remain attractive. Its P/E ratio stands at around 14 times, significantly lower than major global indices, while its dividend yield is close to 2.8%, notably higher than major global stock indices. Even for the STAR 50 Index, which is generally considered relatively expensive, its projected 2026 P/E ratio is below 58 times, with a PEG ratio under 1.2 times, which is not unreasonable for high-growth景气assets.

The 26 potential stocks for 2026 have been released. In terms of allocation direction, sectors like AI technology innovation, high-end manufacturing going global, pro-cyclical stocks, and domestic demand recovery are widely favored by institutions. The high-dividend theme is also expected to serve as a valuable core portfolio holding. Industrial Securities anticipates that the sources of景气度for listed companies in 2026 will primarily concentrate in: first, sectors with strong industrial trends like AI, new energy, defense, and innovative drugs; second, the "price increase chain" benefiting from PPI recovery, "anti-involution," and the translation of global AI capital expenditure into physical assets; third, the "going global chain" that seeks incremental growth overseas and possesses global competitive advantages; fourth, in a low-interest-rate era, high-dividend sectors will remain high-conviction core assets offering compelling value, but as overall corporate profits become more elastic, the stock selection focus might shift from stable dividends to free cash flow.

Based on industry balance, performance delivery, valuation safety, and景气度, Data Bao has selected the best of the best, presenting 26 potential stocks for 2026 (hereafter "Potential Stocks"). This includes 6 pro-cyclical stocks, 5 AI and tech innovation stocks, 5 undervalued high-dividend stocks, 5 domestic demand recovery stocks, and 5 overseas expansion chain stocks. The logic for the pro-cyclical sector hinges mainly on two points: first, the price increase theme driven by potential Federal Reserve interest rate cuts; second, the "price increase chain" benefiting from PPI recovery, "anti-involution," and the translation of global AI capital expenditure. Among the Potential Stocks, China Molybdenum Co., Ltd. and Shenhuo Co., Ltd. belong to the copper and aluminum sectors, respectively, and are expected to exhibit promising growth. For stocks like GCL Energy Integration Co., Ltd., Lomon Billions Group, and Ganfeng Lithium Group Co., Ltd., institutions anticipate significant profit elasticity driven by cyclical reversals. The selection logic for AI and tech innovation stocks primarily involved filtering companies within the TMT sector with strong consensus forecasts for future earnings growth, while also adhering to the principle of industry balance. Ultimately, the list includes Smartsens Technology -W and Hwatsing Technology from the electronics sector, Hehe Information from the computer sector, Yidian Zhaopin from the media sector, and Huace Navigation from the communications sector. Most of these potential stocks are related to the AI industry. For instance, Smartsens Technology -W is a leading domestic CMOS Image Sensor (CIS) supplier, having established a tripartite business structure encompassing "Smart Security + Smartphones + Automotive Electronics." The selection logic for the overseas expansion chain involved identifying companies with a high proportion of overseas revenue, currently low valuations, and promising future growth prospects. For example, Great Star Co., Ltd. derives nearly 95% of its revenue from overseas business. Its latest trailing P/E ratio is around 16 times, and the consensus forecast predicts net profit growth exceeding 19% for both 2026 and 2027. Rainbow Chemical Co., Ltd.'s overseas focus is even more pronounced, with over 99% of its 2024 revenue coming from international operations. The selection principle for consumer stocks considered industry balance, valuation, and dividend potential, with a particular emphasis on the property chain, which has been oversold for an extended period. This led to the inclusion of leading commercial real estate developer Seazen Holdings Co., Ltd., home furnishing leader Oppein Home Group Inc., home appliance maker Hisense Home Appliances Group Co., Ltd., the retail sector's consistently performing, low-valuation, high-dividend Chongqing Department Store Co., Ltd., and the beer industry's growth-oriented Beijing Yanjing Brewery Co., Ltd.. Most institutions still favor the value of high-dividend assets as core holdings. Data Bao focused on screening companies that have announced shareholder return plans for 2025-2027 and are forecast to have high dividend yields. Based on this screening, Huaihe Energy (Group) Co., Ltd. from the power sector, Jangho Group Co., Ltd. from the construction sector, Anhui Expressway Co., Ltd. from the transportation sector, and Soochow Securities Co., Ltd. from the brokerage sector were included in the Potential Stocks list. Regarding forecast dividend yield, Jangho Group's shareholder return plan stipulates an annual dividend payout ratio of no less than 80%. Roughly calculated based on the consensus forecast for 2025 earnings per share and the year-end 2025 closing price, the company's expected dividend yield is close to 6%, ranking first. Additionally, considering the low valuation and stability of insurance stocks, New China Life Insurance Co., Ltd., which has the lowest forward-looking valuation, was included as a high-dividend potential stock.

The Potential Stocks exhibit significant多元化characteristics. Overall, the Potential Stocks combine the characteristics of dividend-based core holdings, growth elasticity, and cyclical reversal, enabling a balanced approach of offense and defense during market fluctuations while capturing structural opportunities. Dividend-based core holdings provide stable dividend income and defensive support, enhancing portfolio resilience amid market uncertainty. Growth elasticity赋予assets爆发potential under technological innovation or industrial upgrade trends, aiding in achieving alpha. The cyclical reversal characteristic means some stocks can敏锐capture inflection points in industry or economic cycles. Compared to previous years, the 2026 A-share market might place greater emphasis on the actual delivery of earnings, thereby driving valuation upgrades. The overall selection logic for the Potential Stocks aligns with this trend: according to institutional consensus forecasts, all Potential Stocks are expected to achieve net profit growth in 2026. Companies like Ganfeng Lithium Group Co., Ltd. and GCL Energy Integration Co., Ltd., which are anticipated to experience cyclical reversals, could see substantial profit surges. Furthermore, the Potential Stocks generally feature relatively high net profits, with the average consensus forecast for 2026 net profit接近5 billion yuan, which also aligns with the current market's increased focus on mid and large-cap stocks.

This is also reflected in the institutional attention and holdings of the Potential Stocks. Data shows that the average number of rating institutions covering the Potential Stocks is接近17. Ten stocks, including Beijing Yanjing Brewery Co., Ltd., Baofeng Energy Group Co., Ltd., and Hisense Home Appliances Group Co., Ltd., are covered by over 20 rating institutions,充分indicating strong institutional favor.

Simultaneously, the Potential Stocks are generally heavily held by institutions. Excluding holdings by general legal persons, 12 stocks, including Anhui Expressway Co., Ltd., Fuyao Glass Industry Group Co., Ltd., Smartsens Technology -W, and Chongqing Department Store Co., Ltd., had institutional ownership ratios exceeding 10% at the end of the third quarter of 2025.

Sina声明: This message is reprinted from a Sina cooperative media source. Sina publishes this article for the purpose of conveying more information, which does not imply endorsement of its views or confirmation of its description. The article content is for reference only and does not constitute investment advice. Investors should operate based on this at their own risk.

Massive information, precise interpretation, all in the Sina Finance APP.

Editor: Ling Chen