The dawn of a new year brings with it a fresh wave of investment strategies from various brokerage firms, setting the stage for their outlooks on the stock market in 2025. Even though the market might experience short-term fluctuations, analysts are optimistic that policy support and a rebound in corporate earnings will provide firm backing for the market's overall resilienceIn particular, sectors such as technology and consumption are seen as potential leaders in the investment landscape of 2025. Additionally, defensive dividend sectors and areas involving mergers and acquisitions are attracting increased attention from investors.

As we transition into 2025, the A-share market has entered a phase of volatilityData from Wind reveals that from January 2 to January 6, the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index all faced downward trendsAlongside this, market trading volumes have shown signs of contraction compared to previous trading periods

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Many brokerage institutions have noted in their early New Year strategy reports that concentrated portfolio adjustments, shifts in market style, and external uncertainties have contributed to short-term market volatilityDespite these conditions, there is a general consensus that these factors are unlikely to mark a significant change in market directionFollowing the continued implementation of supportive policies, a stabilization and rebound in the market are anticipated.

CITIC Securities articulated that the current macroeconomic fundamentals are not the primary factors behind this recent market downturnThey emphasize that the overall economic foundation remains stable, with the Purchasing Managers’ Index (PMI) still above the boom-bust lineThe ongoing "old-for-new" policy continues as scheduled, ensuring that macro liquidity remains reasonably abundantConcerns regarding excessive volatility in the exchange rate are also deemed minimal

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A concentrated portfolio adjustment during the year-end may have exacerbated the current market decline, but there remains potential for significant investments from state-owned enterprises and insurance firms to bolster the market value.

Furthermore, Zhongtai Securities has analyzed the current market adjustments, attributing these shifts to the transition towards value stocksThey noted that the influx of new capital has not sufficiently supported the market, leading to transient shocksThe focal point of current market speculation lies in policymakers’ anticipated actions impacting economic forecasts for 2025, resulting in a pronounced "equity-bond seesaw" effect.

Huazhong Securities remarked that until external risks stabilize, the overall market trend is likely to remain oscillatoryTheir strategic allocations suggest maintaining a high dividend yield as the primary investment pathway while also monitoring automotive and home appliance sectors that are poised for policy-driven growth

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However, any formal policies implemented may create windows for realization of returnsAgricultural and livestock segments, which are expected to witness improved conditions, are also on their radar.

Haitong Securities further elaborated that while current policies are proactive, the recovery of fundamental conditions still requires validationThey predict that the market will experience further oscillatory adjustments in the short term, with dividend-bearing assets gaining favor among value-oriented investmentsFrom a medium-term perspective, growth-stabilization policies are expected to facilitate fundamental improvements, steering market trends upwardAdditionally, sectors characterized by superior fundamentals, such as technology and mid-to-high-end manufacturing, are likely to reclaim the spotlight.

Looking ahead to 2025, analysts hold a generally optimistic outlook, expected to be driven by both policy support and economic recovery

• Factors Influencing Energy Futures Market
• Trends in Financial Technology Development
• Trends in Capital Flows in Emerging Markets
• Meeting the Needs of Foreign Enterprises
• Applications of Supply Chain Finance

Market behavior is anticipated to be marked by increasing structural opportunities amid a trend of upward oscillationIn particular, the continued implementation of proactive fiscal and moderately loose monetary policies is expected to stabilize the economy while helping to restore investor confidenceSimultaneously, corporate earnings are projected to improve, providing solid foundational backing for the market.

In terms of A-share profitability, CITIC Securities argues that as credit and pricing stabilize throughout 2025 and into 2026, a new upswing in A-share earnings is poised to emergeThey predict a gradual recovery in return on equity (ROE) across non-financial sectors driven by improvements in leverage and asset turnover rates, with quarterly profit growth rates on a trajectory of growthThe anticipated year-on-year profit growth rate for A-shares is expected to slightly rise to 0.7% in 2025 from 0.5% in 2024.

From the standpoint of market liquidity, China International Capital Corporation highlights that the introduction of new capital is a significant driver of the recent rally in A-shares

Entering into 2025, factors such as the cumulative savings of Chinese households over the past few years, a gradually improving investment environment, and the ongoing under-allocation of foreign capital in A-shares all suggest an optimistic adjustment in domestic asset allocations and global capital configurations, which may further boost stock index performances.

As per Bank of China Securities, there are reasons to believe that market confidence is poised for repairRecently, the central bank signaled its intention to consider rate cuts and maintaining abundant liquidity throughout 2025. Positive messaging from regulatory authorities is expected to play a vital role in bolstering market confidenceAdditionally, while the non-manufacturing PMI showed marginal improvements, the manufacturing PMI, though slightly low, remains above seasonal averages, with new order indices reflecting sustained demand, underscoring a need for cautious optimism regarding domestic consumption.

In summary, as we look toward 2025, the A-share market is set to benefit from a more proactive and optimistic economic policy landscape, potentially elevating market confidence

The market is likely to exhibit a spiraling upward oscillation as fundamental economic conditions improve and A-share earnings growth begins to experience marginal benefitsThe gradual resurgence of retail investor sentiment combined with institutional investor portfolio adjustments will likely stimulate a quicker influx of new capitalFurthermore, the implementation of structural monetary policies will support the stable development of the stock market.

On the industry front, sectors like technology and consumer goods, alongside dividend-paying stocks and merger and acquisition strategies, are emerging as focal points for investors in 2025. Analysts anticipate that segments such as semiconductors, renewable energy, artificial intelligence, and high-end manufacturing will show robust growth, fueled by policy support and technological advancesConsumer sectors including food, beverages, pharmaceuticals, and home appliances are also projected to thrive as domestic demand continues its recovery, yielding significant market potential

Additionally, resilient dividend-paying sectors and those poised for transformative upgrades through mergers and acquisitions are being regarded as key investment opportunities.

Galaxy Securities has identified three notable structural investment opportunities: firstly, the investment potential of tech innovation within the AI application sector, set against a backdrop of rapid development of new productive forces; secondly, investment prospects within the consumer sector, spurred by expectations around expansive service consumption; and thirdly, as state-owned enterprise reforms advance and market capitalization management is progressively rolled out, sectors with solid profitability, undervaluation, and high dividend yields within state-owned enterprises are positioned favorably.

Haitong Securities also emphasized that the advantageous supply-demand dynamics underpinning China's mid-to-high-end manufacturing are likely to sustain favorable conditions, particularly in the automotive and home appliance industries

They additionally highlight that technology sectors, identified as key areas for policy support, should focus on digital infrastructure, information technology, and semiconductors benefitting from increased fiscal investmentsNotably, this firm points out the significance of keeping an eye on merger and acquisition themes.

The combination of themes and dividends has emerged as a central strategy for CITIC Securities' research teamThey recommend an asset allocation shift towards high-performing growth and domestic consumption while considering dividend stocksTheir suggestions include low-valuation cyclical stocks that are both offensive and defensive, such as large state-owned banks, nuclear power firms, and shipping logistics companiesFrom the perspective of domestic consumption and performance growth, sectors poised for changing industrial trends or market dynamics, such as the internet and new retail technologies, along with AI wearables and autonomous driving advancements, should be highlighted.

In strategic terms, CITIC Jian Investment advises investors to focus on the synergistic interactions arising from dual heavy-hitting and new policies