According to a research report from China Securities Co., Ltd., recent increases in both internal and external disruptive factors indicate that the forces of bulls and bears are still locked in a tug-of-war. The spring rally is expected to be nearing its end, with the market transitioning from an upward trend to a phase of consolidation. The geopolitical conflict between the US and Iran is unlikely to ease in the short term, potentially sustaining the strength of international oil and precious metal prices, with strategic assets expected to maintain a long-term premium. AI computing power demand and capital expenditure are expanding vigorously. The spillover effect of AI computing power driving value increases in segmented industries is noteworthy and is anticipated to form a strong certainty for performance realization by 2026. "HALO" trading is sweeping across the globe, leading to a revaluation of the physical assets sector, with a focus on high-barrier physical assets and incremental segments of AI infrastructure. Key industries to watch include petroleum and petrochemicals, oil shipping, non-ferrous metals, defense, semiconductors, power equipment, and the AI industry chain. The main views of China Securities Co., Ltd. are as follows:

The spring rally is expected to enter its final phase. Since the post-holiday market opening, the All-Share Index has reached new highs, but there is a divergence in capital flow structure. The strong performance of the Renminbi has prompted central bank intervention to control its pace. Coupled with the approaching National People's Congress and anticipated favorable policies, markets historically often see profit-taking during this period. Investor expectations regarding policies have entered a game-theory phase. Overall win rates and risk-reward ratios are expected to improve after the conclusion of the meetings. In summary, with increasing recent disruptions, the spring rally is projected to conclude, shifting the market into a consolidation phase.

The US-Iran conflict has escalated significantly. The conflict saw a major escalation on February 28, 2026, leading to the closure of the Strait of Hormuz and posing a risk of disruption to global energy supply chains. Reviewing the period after the outbreak of the Russia-Ukraine conflict reveals surges in energy product prices, moderate strength in safe-haven assets, and divergent performances among equity assets. Geopolitical risks are difficult to alleviate in the short term, likely supporting continued strength in international oil and precious metal prices, thereby exacerbating global inflationary pressures. Long-term, the vulnerability of energy supply chains is becoming normalized. The security architecture in the Middle East is accelerating its restructuring, and the US strategic focus is returning to the region, potentially redistributing pressure away from the Asia-Pacific. As global order uncertainty deepens further, strategic assets such as commodities, gold, and defense are undergoing a revaluation.

The AI-driven price increase theme continues, with "HALO" trading deepening. NVIDIA's strong financial performance reaffirms the robust expansion of global AI computing power demand. Computing infrastructure remains the core theme, with supporting segments benefiting concurrently. As massive capital expenditures from domestic and international tech giants are progressively deployed, the spillover effect of AI computing power driving value appreciation in specific sub-industries warrants attention. This trend is expected to establish strong certainty for performance delivery by 2026, becoming a core growth engine for the technology sector. "HALO" trading (Heavy Assets, Low Obsolescence) is gaining momentum worldwide. This concept, recently introduced by Goldman Sachs, centers on heavy assets with low obsolescence rates, meaning market capital is shifting from light assets easily replaceable by AI towards physical assets possessing high replication barriers and resilience to technology cycles. The primary logic is that generative AI significantly reduces the marginal costs in light-asset industries, compressing corporate value and profit margins, prompting a market shift towards physical production capacities that are difficult for AI to replace. This shift, combined with a macro-environment of global low interest rates, fiscal expansion, and supply chain restructuring, is leading to a revaluation of the physical assets sector.

There are two aspects to configuring "HALO" assets: Firstly, focus on high-barrier physical assets such as power, non-ferrous metals, and industrial infrastructure. These assets typically feature long construction cycles, individual project investments exceeding tens of billions, and stable cash flows. Secondly, concentrate on the incremental segments of AI infrastructure, such as power equipment supporting computing power and semiconductor materials, which are poised to benefit from the long-term capital expenditure driven by the expansion of AI computing power demand.