A-Share "Spring Rally" Market: Investment Strategy for the Shift from Theme Investment to Fundamental Performance

Based on the analysis of the latest market data, securities firms’ strategic views, and historical patterns, I present a systematic and comprehensive investment strategy report for you.

---

As of mid-January 2026, the A-Share market exhibits the following typical characteristics[1]:

• Index Performance
  : The Shanghai Composite Index entered a technical correction after achieving 17 consecutive gains in January 2026, closing at 4126.09 points on January 17[1]
• Active Trading
  : Total A-Share turnover has remained at a high level, hitting a historic 3.94 trillion yuan on January 14, demonstrating sufficient capital absorption capacity[1]
• Structural Differentiation
  : Volatility has intensified in previously leading hot theme stocks, and the market’s main line is transitioning from thematic concepts to fundamental performance[1]

: The 2026 System Work Conference of the China Securities Regulatory Commission (CSRC) clearly proposed to do a good job in countercyclical adjustment, and the Shanghai and Shenzhen Stock Exchanges raised the margin ratio for margin trading to prevent excessive speculation by leveraged funds[1]. Fiscal policy, monetary policy, and industrial capital have formed a pattern of coordinated efforts, providing a medium-term upward foundation for the market[1].

: Against the backdrop of an “asset shortage”, the equity allocation space for insurance funds has been opened up, new public fund regulations have driven the rise of passive investment, and large-scale redemptions of ETFs have instead provided a window for allocation-oriented funds to enter the market calmly[1].

---

According to research from Guojin Securities[1], historically after the release of policies by regulators guiding the market to “progress steadily and far”, the A-Share market often still performs well in the subsequent period. Similar to the recent situation where the total A-Share index rose by nearly 10% and turnover increased by more than 30%, this has occurred 6 times in the past decade, 4 of which occurred at the beginning of the year, and the A-Share market usually performed well afterwards.

Entering late January, the weight of performance clues during the annual report preview period has started to rise again[1]. CITIC Securities clearly stated: “The adjustment of margin trading ratios does not affect the general direction of the market’s oscillating upward trend, but it will affect the structure. Gameplay in theme sectors has intensified, and the one-sided trend driven purely by narratives and capital relay has ended.”[1]

Research from GF Securities shows[1]: “The market’s main line may switch before and after a volume-driven rally, meaning that some previously theme-concept-led areas lacking fundamental support may not be sustainable, and the market will weed out the false and retain the true, focusing on directions with more ‘solid’ prospects.”

---

According to the strategic consensus of ten leading securities firms[1]:

Time Window	Market Characteristics	Investment Strategy
Late January	Annual report previews are released	Performance verification period, focus on beat-expectation directions
February - Mid-March	Period with the strongest “calendar effect”	Small-cap stocks dominate, sprint period of the Spring Rally
Spring Festival to Two Sessions	Period of policy expectation fermentation	Focus on directions with more sustainable prospects

Based on historical data, the A-Share market has a significant “February Effect”[1]. During the Spring Rally, February is often the strongest rising interval with the “calendar effect” throughout the year, and small-cap stocks are relatively dominant. This pattern provides investors with a clear reference for layout timing.

---

According to the strategic view of Huatai Securities[1]:

• AI Industry Chain (Computing Power Infrastructure, AI Applications)
• Semiconductors and Storage (Equipment, Materials, Chips)
• Cutting-edge technologies such as humanoid robots and commercial aerospace

• Non-ferrous Metals (Copper, Aluminum, Tin, Lithium)
• Basic Chemicals (Coal Chemicals, Pesticides, Polyurethane)
• Power Equipment and New Energy (Energy Storage, Lithium Batteries, Photovoltaics)

• Aviation, Duty-Free, Hotels
• Food and Beverage (Benefiting from residents’ income growth)

• Power Grid Equipment, Energy Storage, Lithium Batteries
• Construction Machinery, Commercial Vehicles

Based on the latest performance preview data[1]:

Sector	Representative Company	Performance Growth Rate	Driving Logic
AI Computing Power PCB	Shenghong Technology	260%-295%	Explosive demand for high-end PCBs
Rare Earths	Northern Rare Earth	117%-135%	Recovery of rare earth prices
Optical Modules	Cambridge Technology	51%-67%	Volume growth of high-speed optical modules
Memory Interfaces	Montage Technology	52%-66%	Growing demand for AI servers
New Energy Materials	Hongyuan Pharmaceutical	119%-166%	Improvement in lithium hexafluorophosphate

[1]:

“A good portfolio should offer a good experience, low resistance, and be anxiety-resistant. This is the advantage of building a portfolio based on ‘revaluation of resource and traditional manufacturing pricing power’ (chemicals, non-ferrous metals, power equipment, and new energy); on this basis, investors can increase allocation to non-bank financials (securities, insurance) on dips, while enhancing returns through some service consumer varieties (such as duty-free, aviation, etc.) or high-prospect varieties (such as semiconductor equipment, etc.).”[1]

---

Phase	Key Strategy Points
Current to Before Spring Festival	Control positions, lay out high-certainty performance and reasonably valued targets on dips
Spring Festival to Two Sessions	Actively participate in the main uptrend of the Spring Rally, focus on allocating to high-prospect sectors
After March	Enter verification period, reduce positions in pure theme speculation, increase allocation to core assets with solid fundamentals

[1]:

“The ranking of current hot themes is: Humanoid Robots > AI Applications > Brain-Computer Interfaces > Commercial Aerospace, etc. Beyond themes, investors are still advised to actively lay out investment opportunities in related fields brought about by potential changes in medium- and long-term fundamentals.”

It is recommended to adopt a “Core + Satellite” strategy:

• Core Positions (60%-70%)
  : Allocate to industry leaders with high performance certainty and sustained prospects
• Satellite Positions (30%-40%)
  : Participate in the rotation of hot themes to capture flexible returns

Risk Type	Risk Description	Response Strategy
Regulatory Risk	Excessive speculation by leveraged funds may trigger tighter regulation	Reduce margin positions, pay attention to policy signals
Performance Risk	Annual report previews fall short of expectations	Focus on leading targets with high performance certainty
Volatility Risk	Increased volatility in hot theme stocks	Manage positions well, avoid chasing gains and selling on dips
Style Switch Risk	Uncertainty in small-cap stock market	Combine core assets with satellite allocation

---

1. Market Nature Remains Unchanged
   : The Spring Rally is still ongoing, and regulatory “cooling” is not a sign of a market peak[1]
2. Switching Window is Approaching
   : The annual report preview period in late January is a key time window for the return to fundamental performance[1]
3. Allocation Direction is Clear
   : Focus on directions with more sustainable prospects, with key attention to AI computing power chain, non-ferrous metals (copper), energy storage and lithium batteries, semiconductor equipment, etc.[1]
4. Medium-Term Optimism
   : With coordinated efforts of fiscal policy, monetary policy, and industrial capital, the market is expected to break the historical pattern of “A-Shares struggling to raise valuations for 3 consecutive years”[1]

• Short-Term (Within 1 month)
  : Remain prudent, control positions, and lay out targets with high performance certainty on dips
• Medium-Term (February-March)
  : Actively participate in the main uptrend of the Spring Rally, focusing on allocating to high-prospect sectors
• Allocation Structure
  : It is recommended to build a foundation around “revaluation of resource and traditional manufacturing pricing power”, increase allocation to non-bank financials and service consumption, while taking into account high-growth tech sectors with strong prospects

---

[1] Cailianshe - “Will the A-Share Spring Market Hit New Highs? What are the Main Investment Lines? Strategies from Ten Leading Securities Firms” (https://www.eastmoney.com/a/202601183622688348.html)

[2] Sina Finance - “Ten Leading Securities Firms’ Views on the A-Share Spring Rally Strategy” (https://finance.sina.com.cn/roll/2026-01-18/doc-inhhttqr8612145.shtml)

[3] Eastmoney - “Sorting and Analysis of 2026 January A-Share Performance Announcements” (https://caifuhao.eastmoney.com/news/20260117114635959147610)

[4] CITIC Securities, Summary of Securities Firms’ Strategic Research Report Views (January 2026)