In April, the consensus on recommended stocks by brokerage firms is now 315 stocks on the recommendation list.

Reporter Zhou Shangfei

Broker monthly “top stock” portfolios are always one of the signals that institutional capital uses to gauge market direction. With the April investment window having opened, as of the time the Securities Daily reporter’s稿 was released on April 6, 42 brokerages have issued monthly investment strategies, with a total of 315 individual stocks entering the April “top stock” recommendation list. Judging from industry distribution and stock concentration, global-competitive leading enterprises and sub-sectors that align with long-term industry trends have become the configuration directions that brokerages largely agree on.

Focus on core high-quality assets

Among the many recommended targets, in April, three stocks—CATL, InnoCare Optoelectronics, and BYD—ranked highest in terms of recommendation heat. They received joint recommendations from 9, 8, and 7 brokerages respectively, highlighting the trend of institutional capital concentrating on leading high-quality assets.

Specifically, CATL has already been strongly recommended by nine brokerages: Huatai Securities, Zhongyuan Securities, Soochow Securities, Guotou Securities, Bank of Beijing Securities, Guotai Haitong, Open Source Securities, Huchuang Securities, and CICC. Open Source Securities’ stated rationale is that CATL is the global leader in lithium batteries, with extremely strong earnings resilience. With geopolitical factors disrupting the increase in oil and gas prices, the strategic position of new energy is being raised.

For InnoCare Optoelectronics, according to China Galaxy Securities, as global artificial intelligence build-out accelerates, the company, as a global leading enterprise, benefits from growth in demand for high-speed optical modules represented by 800G. This is complemented by the increasing penetration rate of silicon photonics optical modules. At the same time, with mass production and scaled shipment of 1.6T optical modules mainly based on silicon photonics solutions, the products have a foundation for both volume and price to rise.

For BYD, Zhongyuan Securities believes that the launch of the company’s flash charging technology will open a new product cycle and drive growth in domestic sales. Meanwhile, benefiting from rising oil prices, the company’s export business is expected to continue to achieve strong growth.

From an industry perspective, according to statistics from Guoxin Securities, in April brokerages’ key focus for their “top stock” selections is on basic chemical industry, electronics, non-ferrous metals, machinery, communications, and other fields. Brokerages have added positions relatively heavily in communications, banking, and transportation.

Regarding the overall assessment of the A-share market in April, brokerage analysts generally believe the market is in an “intermediate-term relative low point.” After risk has been released sufficiently, the probability of an upward rebound amid consolidation is relatively high.

“Right now may be the A-share intermediate-term relative low point.” Li Jin, an analyst at CICC, said that although there is still uncertainty in the near-term price trend, after going through adjustments, risks in the A-share market have been further released, and valuations are at a relatively reasonable level. From the intermediate-term perspective, the macro environment where the market is located has not undergone fundamental change. The logic supporting the “steady advance” of the A-share market still holds, and the release of risk along with downturn-adjustment is expected to bring favorable opportunities for allocation.

Yang Chao, Chief Strategy Analyst at China Galaxy Securities, further analyzed that the three major logics—policy support, capital entering the market, and the revaluation of Chinese assets—have not changed. The downside room for A-shares is relatively limited. External geopolitical conflicts have not shaken the foundation of the A-share long-term “slow bull market.” He suggests adopting an approach centered on performance while laying out positions when opportunities arise.

“Chinese assets internally have stability; in the medium term, they are likely to move upward amid volatility. We suggest seizing the opportunities to build positions.” Zhang Yusheng, Chief Strategy Analyst at Everbright Securities, said that China’s domestic market has a relatively high energy self-sufficiency rate, which provides a certain degree of resistance to sustained increases in external energy prices. In addition, judging from volatility in several recent rounds of overseas markets, China’s exports typically benefit when external uncertainties rise. Over the medium term, Chinese assets internally have stability and are expected to attract continued capital inflows.

In terms of specific allocation directions, Qu Xiang, Chief A-share Strategy Analyst at CITIC Securities, proposed three major allocation clues: first, those categories that saw relatively large adjustments earlier, whose share prices have stabilized over the past week but whose fundamentals are strong and whose earnings are capable of being delivered—such as chromium, copper, and rare earths; second, categories whose demand narrative is relatively insulated from macro conditions and that have independent industry trends—such as wind power, silicon carbide, household energy storage, and innovative drugs; third, categories that are relatively hard-need, but whose supply faces clear constraints. Under an oil-price shock, profits are likely to flow to the most tightly supplied-demand links along each industry chain, such as glyphosate and refrigerants.

March “top stock” selections show structural characteristics

Looking back at the performance of broker “top stock” picks in March, data from Wind Information shows that against a backdrop of intensified market volatility, among 342 “top stocks” that month, 62 achieved share-price gains, accounting for about 18.13%. The structural characteristics were significant.

In terms of individual stock performance, in March there were four “top stocks” whose gains exceeded 20%. Among them, the top performer was Foshan Plastics Technology, recommended by China Merchants Securities, with a gain of 35.16%. Second place went to Yuanjie Technology, recommended jointly by Pacific Securities, Zhongyuan Securities, and Shenwan Hongyuan Securities, with a gain of 30.59%. Next came Yaxing Integration recommended by Guoxin Securities and Baofeng Energy recommended by Soochow Securities, with gains of 24.74% and 21.44%, respectively, following shortly after.

In addition, the gains for Wei Xing Chemical recommended by Donghai Securities, BYD recommended jointly by AVIC Securities, Yangtze Securities, and Haitong International, CATL recommended jointly by Huchuang Securities, Guolian Minsheng, and CICC, Nocil Health recommended by Ping An Securities, and Huagong Technology recommended by Zhongyuan Securities all exceeded 15% that month. They covered multiple fields ranging from upstream materials to high-end manufacturing, information technology, and biopharmaceuticals, showing that in a volatile market, selecting precise industry tracks is the key to capturing excess returns.