Public Fund Decoding 2026 Investment Main Line

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Source: International Financial News

Currently, AI-related fields remain the focus of the tech investment wave. Experts believe that in the second half of this year, the “computing and electricity collaboration” and “AI+” sectors will gradually realize performance growth expectations. Investors can make predictions by focusing on the bidding volume increase in Q2. However, they should also remain rational, avoiding bubbles with excessive gains and lacking performance support.

Since the beginning of this year, the A-share market has shown volatility, with sector rotations accelerating. How should investors seize opportunities? During the two sessions, many investment institutions and industry insiders provided outlooks on investment opportunities in the capital market based on the government work report and the 14th Five-Year Plan.

According to multiple public fund managers and professionals, technological innovation remains one of this year’s main investment themes, with AI-related subfields being key focus areas. Notably, “computing and electricity collaboration” was included in the government work report for the first time, presenting promising investment opportunities. Additionally, undervalued domestic demand sectors and Hong Kong stocks receiving continuous southbound capital inflows are also important directions for institutions.

Maintaining macro policy continuity

This year’s government work report continues the macro policy stance, guiding investment directions for public funds and other investors.

“Both fiscal and monetary policies maintain the overall tone set for 2025, with steady policy strength,” said Guotai Fund. Fiscal policy remains “more proactive,” and monetary policy continues to be “moderately relaxed,” characterized by precision and flexibility. New structural policy tools aim to guide financial “fresh water” more efficiently toward expanding domestic demand, technological innovation, and other key areas.

Fullwealth Fund noted that focusing on the capital market, the stability of the overall economy and society is the best “ballast,” while continuous progress in science and education will bring more investment opportunities.

Jia Shi Fund analyzed that the government work report’s proposals—such as “implementing special actions to boost consumption,” “cultivating and expanding emerging and future industries,” “creating new forms of smart economy,” and “strengthening original innovation and key core technology breakthroughs”—provide clearer directions for capital market opportunities in related industries.

“Two sessions’ policies clearly signal ‘steady growth, strong technology, and promoting consumption,’” explained Southern Fund. Stabilizing growth, as a fundamental macro goal, is achieved through more proactive fiscal policies and moderately loose monetary policies to solidify economic fundamentals. Strengthening technology focuses on accelerating the development of new productive forces, especially in AI, advanced manufacturing, and future industries. Promoting consumption is a key tool for expanding domestic demand, leveraging income increases, old-for-new exchanges, and service upgrades to boost consumption and market vitality.

Caitong Fund believes that the policy signals from the two sessions highlight the cultivation and expansion of emerging and future industries.

Technology leads the investment theme

Technological innovation remains a key focus in current investments.

On March 6, Wu Qing, Chair of the China Securities Regulatory Commission, stated at the Fourth Session of the 14th National People’s Congress: “This year’s government work report explicitly proposes that for key core technology enterprises, a ‘green channel’ mechanism for listing, mergers, and acquisitions will be implemented routinely to support innovation through financial means.”

“From China’s reality, whether it’s cultivating emerging industries, ahead-of-time layout of future industries, or innovating and greening traditional industries, further leveraging the capital market’s functions is necessary to accelerate the integration of technological and industrial innovation. The development of new productive forces will support higher-quality growth of the capital market and bring better, sustained returns for investors,” Wu Qing said.

Southern Fund noted that with major favorable policies for tech finance, innovations like the National Venture Capital Guidance Fund and patience capital, along with the normalization of listing financing for key core technology companies, will facilitate a virtuous cycle of “technology-industry-finance.” Under strong policy support, new productive forces such as AI, advanced manufacturing, and future industries are expected to flourish, becoming the core engines of China’s economic transformation and upgrading.

“Industrial structure upgrades, especially in the tech innovation sector, remain key policy priorities,” said Bosera Fund. The directions of AI, digital economy, high-end manufacturing, and green energy have been repeatedly emphasized, reflecting ongoing policy focus on cultivating new productive forces. For the capital market, this indicates that structural opportunities under economic transformation will continue to be the main research focus.

Specifically, related to subfields, AI-related areas remain the focus of the tech investment wave.

Great Wall Fund manager Han Lin suggests paying attention to segments with rigid supply and demand and domestic substitution logic within AI and general AI, such as overseas new computing technologies, domestic computing power, semiconductor equipment and materials, and overseas power infrastructure. Yu Huan, another manager at Great Wall Fund, recommends focusing on upstream industries benefiting from AI-driven price increases, midstream industries with supply-demand mismatches leading to growth, and downstream AI applications or those benefiting from overseas expansion and earning excess returns abroad.

“Infrastructure represented by computing power is experiencing a boom, with ongoing opportunities in optical communications, space computing, domestic chips, PCBs, liquid cooling, and storage,” said Liu Jiang, fund manager at Great Wall Fund. He also suggests exploring new business models driven by new models and agents (intelligent entities), and in embodied intelligence scenarios, tracking developments in humanoid robots, autonomous driving, unmanned vehicles, and drones.

Jia Shi Fund recommends focusing on the “AI+” opportunities generated by the diffusion of AI, including applications that create benefits through AI, as well as sectors benefiting from AI demand, capacity expansion, and increased localization, such as storage and advanced semiconductor equipment. It also includes revaluation opportunities for traditional industries extended by AI infrastructure investments.

Bosera Fund also emphasizes AI, high-end equipment, and semiconductors.

Caitong Fund believes that beyond high-tech manufacturing and equipment manufacturing, related opportunities also emerge along the “Digital China” development goal, especially as the proportion of digital economy industries increases from 10.5% to 12.5%.

The end of computing power is electricity

As AI computing power consumption continues to rise, energy demand is expanding accordingly.

Caitong Fund points out that the shift from “dual energy consumption control” to “dual carbon emission control” driven by green low-carbon and energy transition policies can be a key investment theme. Additionally, with the “14th Five-Year Plan” including 109 major projects in new productive forces, modern infrastructure, and green low-carbon fields, focus areas include: computing power and industrial software, clean energy and new power systems, high-end equipment and industrial mother machines, aerospace and low-altitude economy, equipment upgrades and old-for-new consumer goods, future energy, quantum technology, embodied intelligence, brain-computer interfaces, 6G, and other future industries.

Bosera Fund believes that industries related to energy transition—such as new energy, power grid upgrades, and energy storage—are worth long-term attention.

The market generally agrees that the core support for computing power is electricity. Currently, AI computing power is growing exponentially but faces physical energy consumption limits. In this context, “computing and electricity collaboration” has emerged as a new development direction.

Zhang Chaoyue, head of the Northeast Securities strategy team, told reporters: “‘Computing and electricity collaboration’ being included in the government work report for the first time marks that this initiative, previously at departmental special actions and pilot stages, has been elevated to a national strategic plan. The fundamental driver is to turn China’s electricity advantage into a dominant cost and industrial ecosystem in the global AI competition.”

He added, “This year’s government work report has many mentions of AI, with more specific descriptions of new forms of intelligent economy compared to previous years.” He highlighted the deployment of “large-scale intelligent computing clusters, computing and electricity collaboration, strengthening nationwide integrated computing monitoring and scheduling, and supporting public cloud development” as particularly noteworthy.

How will “computing and electricity collaboration” be implemented, and what investment opportunities does it hide?

Zhang Chaoyue explained that this will profoundly change the operational logic of the “computing” and “electricity” industries, generating a new value chain through collaboration. He suggests focusing on leading companies that have already achieved integrated “computing and electricity” layouts; second, on intelligent computing centers (AIDC) operators benefiting from explosive demand for computing power and cost reductions from collaboration; third, on providers of intelligent scheduling software (core of collaboration); and fourth, on power equipment suppliers (hardware foundation) and EPC (engineering, procurement, construction) firms.

"‘AI+’ and ‘computing-electrical collaboration’ are core investment opportunities in new infrastructure,'” said Han Wei, managing director of Taishi Investment. He noted that this year, for the first time, “computing and electricity collaboration” was explicitly listed as a new infrastructure project in the two sessions, with the government emphasizing the construction of intelligent economic forms through “large-scale intelligent computing clusters + computing-electrical collaboration.” The State Council’s briefing further pointed out that “the end of AI is energy,” highlighting the foundational role of the national power grid system in AI industry development.

Han Wei further analyzed that, on one hand, with exponential growth in AI computing power, power load density continues to rise, making traditional grids unable to meet the dynamic energy consumption needs of intelligent computing centers. Computing and electricity collaboration can balance supply and demand by intelligently dispatching green electricity and energy storage resources. Currently, demand for computing power, electricity, and collaboration capabilities is exploding. On the other hand, policies clearly require that ultra-large intelligent computing centers be supported by new power grid systems, which will bring definite incremental markets in ultra-high-voltage transmission for cross-regional energy transfer, flexible DC distribution to meet data center reliability needs, and energy storage for fluctuation smoothing—potentially totaling trillions in market size.

Han Wei believes that benefiting from strong domestic and international demand, leading domestic equipment companies in ultra-high-voltage core devices, intelligent transformers, distributed green energy operators supporting computing clusters, and short-term high-frequency peak regulation technology providers will see substantial investment opportunities.

Based on this, he predicts that in the second half of this year, “computing and electricity collaboration” and “AI+” sectors will gradually realize performance growth expectations. Investors can monitor the bidding volume increase in Q2 for early signals. Meanwhile, he reminds investors to remain rational and avoid bubbles with excessive gains and no performance support.

“Consumption” is worth looking forward to

This year’s government work report again prioritized expanding domestic demand, emphasizing coordinated efforts to promote consumption and expand investment, creating new growth space.

“The government work report places greater emphasis on expanding domestic demand, upgrading from short-term stimulus to a comprehensive approach integrating income, credit, and scenarios,” said Southern Fund. It supports durable goods renewal with fiscal and financial funds, proposes income increase plans for residents, and innovates with measures like optimizing vacation systems to create new consumption scenarios.

Southern Fund further pointed out that these measures directly address people’s livelihood concerns, aiming to fundamentally enhance residents’ consumption capacity and willingness, and accelerate the construction of a strong domestic market. As policy dividends continue to be released, China’s massive market advantage will further convert into endogenous growth momentum.

Guotai Fund believes that expanding domestic demand has been the top task for two consecutive years, mainly by activating internal growth through institutional reforms. Demand-side efforts focus on releasing service consumption potential and leveraging new infrastructure investments, while on the consumption side, income increase plans and paid leave policies are being implemented. On the investment side, new policy-based financial tools are being expanded, with key focus on new infrastructure.

Tianhong Fund is also optimistic about the recovery of domestic demand, believing that policies targeting consumption scenarios will precisely stimulate internal potential, with a recovery expected by 2026.

For capital markets, this suggests that opportunities for valuation revaluation may have already opened in undervalued sectors.

Regarding specific investment strategies, Jia Shi Fund recommends actively exploring undervalued domestic demand sectors and cyclically oriented assets, including high-quality targets benefiting from old-for-new exchanges and expanded goods and services consumption.

Bosera Fund suggests focusing on consumption upgrades and service consumption sectors, such as healthcare, elderly care, and cultural tourism, which align with national industrial upgrade strategies and have strong long-term growth potential.

Hong Kong stocks hold investment opportunities

Turning to Hong Kong, the government work report’s emphasis on technological innovation has injected new imagination into the market, home to many leading new economy companies.

“Overall, Hong Kong’s tech sector this year will face both opportunities and challenges, with significant volatility likely,” said China Europe Fund. Thanks to flexible listing systems, Hong Kong has attracted many high-growth new economy firms. Meanwhile, traditional internet giants are accelerating their transformation into “AI+” enablers, leveraging vast user ecosystems and data barriers, making Hong Kong a natural ground for AI commercialization.

Despite increased volatility since the start of the year, the Hang Seng Tech Index remains in correction, but southbound funds are strongly inclined to buy, maintaining large inflows. Wind data shows that as of March 11, net southbound capital inflow this year exceeded HKD 170 billion.

“Large-scale inflows of southbound funds indicate that domestic investors’ influence on core Hong Kong assets is shifting from quantity to quality, gradually offsetting external market fluctuations,” said China Europe Fund. This trend also suggests a rebalancing of valuation and growth prospects in Hong Kong stocks. Previously, concerns over the pace of AI commercialization caused some declines in tech giants, but their attractive valuations have attracted southbound capital to increase holdings. Continuous inflows into top tech leaders reflect that Hong Kong stocks may have moved from a “deep correction” phase to a “medium- to long-term value anchoring” cycle.

China Europe Fund also notes that, besides emerging industries, many traditional sectors such as upstream resources, building materials, chemicals, manufacturing, and consumer goods are experiencing valuation revaluation opportunities. As industry capacity self-corrects, capital expenditure decreases, industry competition improves, and higher-quality development is achieved.