As we welcome the Year of the Horse, I extend my sincerest wishes to the readers and the broader investment community. As a value investor with three decades of experience in capital markets, I firmly believe that "each era has its defining enterprises, and aligning with trends is key to achieving greatness." Standing at the beginning of 2026, which marks the start of the 15th Five-Year Plan period, and against the backdrop of China's economic transformation and capital market reforms, I would like to share several core insights.
China's economy in 2026 demonstrates stability, improvement, and remarkable resilience, undergoing a comprehensive shift from scale expansion to quality enhancement. The core logic supporting this view lies in China's possession of the world's most complete industrial chain system, a continuously growing engineer dividend, and a vast domestic market. Technological innovation and industrial upgrading are the central engines driving economic growth.
Structural opportunities will concentrate in sectors with potential for technological breakthroughs and alignment with national strategic directions. Among these, the "New Five Golden Flowers of the AI Era"—semiconductors, AI applications, new energy, robotics, and AI-powered innovative pharmaceuticals—are poised to become the core forces leading economic growth. Examining each sector: In semiconductors, domestic substitution and technological iteration are creating a powerful synergy, entering a critical phase of transitioning from "catching up" to "running alongside." AI applications are in their early explosive growth stage, with large models deeply integrating into industry scenarios, reshaping productivity and business models across sectors; companies with advantages in data and computing power are set to maintain leadership. The new energy sector has moved beyond disorderly competition into a phase where quality prevails; as the energy foundation for the AI era, global green transition demands will continue to benefit leading high-quality companies. The robotics industry has achieved a "zero to one" breakthrough, with the deep integration of AI and hardware manufacturing accelerating commercial deployment, making it a crucial tool for alleviating labor shortages and enhancing production precision. Following a period of adjustment, the AI-powered innovative pharmaceutical sector sees local companies' R&D capabilities ranking among the global forefront, transitioning from "me-too" to "first-in-class" drugs, with an accelerating global expansion driving value reassessment. These five sectors represent both the core vehicles for China's industrial advancement and key focal points for high-quality economic growth in 2026.
The current bull market characteristics are not a short-term bubble driven by capital but a structural bull market catalyzed by industrial upgrading and economic transformation. The core logic is that companies aligning with technological trends and possessing core competitiveness are seeing their valuations gradually return to reasonable ranges, supported by continuously improving fundamentals. This embodies the essence of value investing.
Looking ahead to the Year of the Horse, China's capital markets will continue to follow a logic of "primarily structural trends within an overall stable and improving context." Capital is further concentrating towards high-quality sectors and superior companies, making the leading-player effect increasingly pronounced. Furthermore, steady macroeconomic recovery, the long-term trend of household wealth shifting towards equity markets, and sustained foreign allocation to China's quality assets provide ample liquidity support for the capital markets.
The strategy for the Year of the Horse should adhere to a core principle of "balancing offense and defense, with emphasis on offense." "Defense" means坚守 the essence of value investing, using "monopoly, scarcity, and perpetual cash flow" as core criteria to select high-quality companies with solid fundamentals and reasonable valuations, while avoiding risks associated with speculative hype and earnings fraud. "Offense" involves aligning with industrial trends, actively positioning in core sectors with high growth potential, and capturing the alpha opportunities presented by technological innovation and industrial upgrading. Our practice of conducting on-site research at over five hundred listed companies verifies that true alpha comes from value enhancement driven by corporate growth, not short-term market fluctuations.
The industrial wave of the AI era has arrived, the opportunities presented by China's high-quality economic transformation are ahead, and the value feast in the capital markets is gradually unfolding. The "New Five Golden Flowers of the AI Era" remain the core focus for strategic positioning.
I wish all investors vigor, prosperity, and a year filled with abundant returns, happiness, and good health!