Galaxy Strategy: "15th Five-Year Plan" Sets Tone - Which Sectors Reflect A-Share Resilience?

Key Points

This Week’s A-Share Market: (1) From March 9 to March 13, 2026, the A-share market experienced volatility and adjustments, with major broad-based indices showing mixed performance. The All A-Index declined by 0.48%. The Sci-Tech Innovation 50 and Beijing Stock Exchange 50 fell over 2%. Meanwhile, the ChiNext Index, Shenzhen Component, and CSI 300 rose, with the ChiNext Index up 2.51%.
(2) In terms of style, the large-cap style outperformed this week, with the CSI 300 (0.19%) outperforming the CSI 1000 (-0.42%). The five major style indices showed varied performance, with the cyclical style falling 1.72% and the stable style rising 3.16%.
(3) Sector-wise, most primary industries declined, with coal, electrical equipment, and construction decoration leading gains (5.03%, 4.55%, 4.12%). Defense military, petroleum refining, and comprehensive sectors saw larger declines.

Fund Flows This Week: (1) Market activity slightly cooled. The average daily turnover was 2.4987 trillion yuan, down 145.9 billion yuan from last week; the average daily turnover rate was 2.1332%, down 0.11 percentage points.
(2) As of Thursday, the margin financing and securities lending balance was 2.6646 trillion yuan, up 19.1 billion yuan from last week.
(3) Among newly established funds this week, 21 equity funds issued 19.824 billion units, up 14.59 billion units from last week; they accounted for 54.93% of total fund units issued this week.
(4) From March 5 to March 11, global funds net withdrew 3.615 billion USD from A-shares (previously a net inflow of 1.471 billion USD). Overseas funds withdrew 1.035 billion USD from A-shares (previously a net inflow of 1.144 billion USD).

Valuation Changes This Week: The PE (TTM) of the All A-Index decreased by 0.44% to 23.33x, at the 94.22% percentile since 2010. The PB (LF) decreased by 0.27% to 1.93x, at the 56.66% percentile since 2010. The bond yield spread of A-shares was 2.4717%, near the 3-year rolling average (3.3177%) minus 1.63 standard deviations, at the 42.78% percentile since 2010.

Market Outlook for A-shares: Since late February, escalating US-Iran tensions have repeatedly disturbed market sentiment, causing oil prices to fluctuate sharply and inflation expectations to rise. The Fed’s rate cut expectations have been dampened, suppressing risk asset performance. Compared to the global equity markets’ general correction, the A-share market has shown resilience. The 2026 government work report emphasizes domestic demand-led growth, cultivating new drivers, and high-level technological independence. The 14th Five-Year Plan focuses on high-quality development, modern industrial systems, and strategic technological self-reliance, maintaining an expansion of domestic demand as a strategic foundation. Long-term, this clarifies the investment logic of seeking “quality” in the “new” economy. Supported by market resilience and a “domestic-led” approach, the market is expected to gradually shift from “emotion-driven” to “fundamentals-driven,” with performance becoming the core anchor in the next phase.

Allocation Opportunities:

1. Price-increasing and risk-hedging sectors: Ongoing US-Iran tensions and Strait of Hormuz tensions boost energy and alternative demand, leading to repeated activity in related sectors, with potential increased volatility. Focus on chemicals, non-ferrous metals, coal, shipping ports, and oil & gas.
2. Improved supply-demand dynamics and industry profit recovery: “Anti-involution” concepts and dividend assets with valuation safety margins. Focus on basic chemicals, non-ferrous metals, steel, construction materials, and financials (especially banks).
3. Technology innovation theme: A long-term certainty line. Key areas include power equipment, new energy, storage, computing power, consumer electronics, communication equipment, semiconductor, and military industries. For consumer sectors, focus on light industry, textiles, home appliances, and agriculture.

Risk Warnings: External uncertainties; policy risks below expectations; market sentiment instability and liquidity adjustments.

Main Text

1. Weekly Market Review

(1) Index Performance

From March 9 to March 13, 2026, the A-share market experienced volatility and adjustments, with broad indices showing mixed results. The All A-Index fell 0.48%. The Sci-Tech Innovation 50 and Beijing Stock Exchange 50 declined over 2%. Conversely, the ChiNext Index, Shenzhen Component, and CSI 300 rose, with the ChiNext Index up 2.51%.

In terms of style, large-cap stocks outperformed, with the CSI 300 (0.19%) outperforming the CSI 1000 (-0.42%). The five major style indices varied, with the cyclical style dropping 1.72% and the stable style rising 3.16%.

(2) Sector Performance

Most primary sectors declined this week. The top gainers were coal, electrical equipment, and construction decoration, with gains of 5.03%, 4.55%, and 4.12%. Major declines were seen in defense military, petroleum refining, and comprehensive sectors.

Secondary industry performance saw wind power equipment, batteries, infrastructure, photovoltaic equipment, and coal mining as the top five gainers. The lowest performers included minor metals, shipping equipment II, aerospace equipment II, ground military equipment II, and aviation equipment II.

(3) Fund Flows

Market activity slightly cooled compared to last week. The average daily turnover was 2.4987 trillion yuan, down 145.9 billion yuan; the average daily turnover rate was 2.1332%, down 0.11 percentage points.
As of March 12, the margin financing and securities lending balance was 2.6646 trillion yuan, up 191 billion yuan from last week.
New funds established this week totaled 30, issuing 36.088 billion units, with 21 equity funds (including stock and hybrid funds) issuing 19.824 billion units, up 14.59 billion units from last week, accounting for 54.93% of total units issued this week.
As of March 14, IPOs numbered 1, raising 293 million yuan; refinancing by 5 companies raised 2.513 billion yuan.

Next week, market fund outflows are expected to ease. This week, 42 companies had lock-up shares released, totaling 1.988 billion shares with a market value of 55.736 billion yuan. Next week (March 16-22), 33 companies will have lock-up shares released, totaling 819 million shares, with an estimated market value of about 26.786 billion yuan based on March 13 closing prices.
According to EPFR data, from March 5 to March 11, global funds net withdrew 3.615 billion USD from A-shares (previously a net inflow of 1.471 billion USD). Overseas funds withdrew 1.035 billion USD (previously a net inflow of 1.144 billion USD), including active funds net outflows of 133 million USD and passive funds net outflows of 929 million USD.

Structurally, analyzing global fund allocations for Chinese assets, industrial sectors received the largest net inflow of 1.304 billion USD, followed by commodities/materials and utilities. Tech sectors saw significant net outflows, with energy, finance, healthcare/biotech, and real estate also shifting from inflows to outflows, with continued outflows from consumer goods.
Overseas funds’ net outflow from energy was 15 million USD, and from industrials 15 million USD, with infrastructure at 5 million USD. Tech sector saw a large net outflow of 569 million USD, and healthcare/biotech also experienced significant outflows.

(4) Valuation Changes

As of March 13, the PE (TTM) of the All A-Index decreased 0.44% to 23.33x, at the 94.22% percentile since 2010, indicating a relatively high level historically. The PB (LF) decreased 0.27% to 1.93x, at the 56.66% percentile since 2010.
The 10-year government bond yield was 1.8143%, up 3.33 basis points from last week. The active 10-year treasury futures contract closed at 108.22, down 0.29. Based on this, the bond spread of A-shares was 2.4717%, near the 3-year rolling average (3.3177%) minus 1.63 standard deviations, at the 42.78% percentile since 2010.

At the industry level, among 31 primary industries, 10 saw rising PE valuations. As of March 13, 22 industries had PE valuations above the 50th percentile since 2010, 6 industries between the 20-50% range, and 3 below the 20% percentile. Real estate, retail, and computing had the highest PE percentile levels (98.01%, 92.57%, 92.34%), while non-bank financials, food & beverages, and agriculture had the lowest (1.71%, 13.67%, 17.19%).

2. Market Outlook for A-shares

Since late February, escalating US-Iran tensions have repeatedly disturbed market sentiment, causing oil prices to fluctuate sharply and inflation expectations to rise. The Fed’s rate cut expectations have been dampened, suppressing risk assets. Compared to global markets’ correction, the A-share market has shown resilience. The 2026 government work report emphasizes domestic demand-led growth, cultivating new drivers, and technological independence. The 14th Five-Year Plan emphasizes high-quality development, modern industrial systems, and strategic technological self-reliance, maintaining an expansion of domestic demand as a strategic foundation. Long-term, this clarifies the investment logic of seeking “quality” in the “new” economy.

Supported by market resilience and a “domestic-led” approach, the market is expected to gradually shift from “emotion-driven” to “fundamentals-driven,” with performance becoming the core focus in the next phase.

Allocation Opportunities:

1. Price-increasing and risk-hedging sectors: Continued US-Iran tensions and Strait of Hormuz tensions boost energy and alternative demand, leading to activity in chemicals, non-ferrous metals, coal, shipping ports, and oil & gas sectors, with potential increased volatility.
2. Improved supply-demand and profit recovery: “Anti-involution” concepts and dividend assets with valuation safety margins. Focus on basic chemicals (e.g., chemical products, raw materials, agrochemicals), non-ferrous metals (industrial, minor, precious metals), steel, construction materials, and financials (especially banks).
3. Technology innovation: A long-term certainty line. Focus on power equipment, new energy, storage, computing power, consumer electronics, communication equipment, semiconductors, and military industries. For consumer sectors, focus on domestic and external demand-driven sectors like light industry, textiles, home appliances (with export potential), and agriculture.

3. Risk Warnings

External uncertainties; policy risks below expectations; market sentiment instability and liquidity adjustments.

(Article source: Galaxy Securities)