Clues on Industry Allocation in the Latest Financial Reports from China and the U.S

Annual report forecast boots drop, A-shares are expected to welcome the strongest calendar effect spring surge stage From a macro perspective, the pressure of annual report forecasts for 2025 remains significant. The proportion of companies with low expectations, losses, or negative growth has reached a new high compared to 2024. After 2018, listed companies often "clean up their financial statements" in Q4. Looking ahead, after the boots drop, the period from the Spring Festival to the Two Sessions is the stage with the strongest calendar effect for spring surges. Historically, around the Spring Festival, the market has a high win rate, with small-cap styles prevailing. Industry allocation clues from the latest financial reports in China and the U.S. Reversal Strategy ①: From a right-side perspective, which industries that have already seen a profit turning point in Q3 2025 will validate recovery trends in Q4? Mainly driven by AI and energy storage, Q4 lithium battery materials and storage continue to recover. Looking ahead, current North American financial reports indicate that storage is the strongest sub-sector trend; if lithium carbonate prices are controllable, lithium battery materials and equipment stocks are also expected to reflect fundamental trends. Reversal Strategy ②: From a bottom-side perspective, which industries may have reached a profit turning point in Q4 2025? Mainly in the computer sub-sector, part of the turning point stems from the continuous contraction of previous expenses and personnel. This also represents a degree of "capacity clearing," which can be viewed through the framework of supply clearing + demand improvement. Looking ahead, with the fundamentals no longer dragging behind, pay attention to AI application opportunities before and after the Spring Festival. Reversal Strategy ③: From a left-side perspective, which industries are still under pressure but show signs of demand-side improvement in their financial reports? Mainly related to the U.S. manufacturing export chain. From the disclosed companies, the Q4 performance of the export chain is likely under pressure due to exchange rate appreciation, tariffs, and demand. Looking ahead, current U.S. manufacturing construction spending is at historical lows, while industrial machinery orders have been continuously improving. In the latest FY25Q4 North American financial reports, TI and Caterpillar both mentioned the trend of recovery in North American industry/manufacturing, driven by data center construction, the IIJA Act, and infrastructure projects. Tesla has also significantly increased CAPEX, reflecting the trend of manufacturing return. Improvement in North American demand can be expected in 2026 Economic Strategy: In high-growth tracks, what are the low-position stagnation directions? Overseas computing power, domestic computing power, export α, offshore wind, panels, CXO. After the end of the annual report forecast game, particularly focus on the allocation opportunities in overseas computing power and domestic computing power. Recent progress in a series of models and computing power projects in North America indicates that industrial transformation is still trending. Finally, the A-share annual report forecast has landed, and it will soon enter a financial report window period, while the US stock earnings season has just begun. The changes in overseas demand revealed in US stock earnings, as well as their reflection on A-share prices, are worth paying attention to. This article organizes the disclosure dates of relatively important US companies' earnings in the appendix. Risk Warning: Geopolitical conflicts exceeding expectations, liquidity easing lower than expected, and low expectations for growth stabilization, etc. Report Body I. The annual report forecast has landed, and A-shares are expected to welcome the strongest seasonal volatility phase in the calendar. (A) The annual report forecast has landed Overall, the pressure of the 2025 annual report forecast remains significant. The proportion of companies with low expectations, losses, or negative growth has reached a new high compared to 2024. Perspective ①: The proportion of companies with low expectations is 67.3%, higher than the three-year profit decline cycle from 2022 to 2024. Perspective ②: The proportion of companies with quarterly losses or negative growth in Q4 is 70%, also a new high in recent years. In fact, since 2018, listed companies have engaged in significant financial statement washing in Q4. As shown in the figure below, after 2018, influenced by impairment, tax payments, bonuses, and other factors, listed companies' Q4 profits have seen significant quarter-on-quarter negative growth. (B) Looking ahead, A-shares will welcome the strongest seasonal volatility phase in the calendar. After the annual report forecast has landed, the market will enter February. Historically, February and the period around the Spring Festival are the strongest phases for seasonal volatility. The market has a high win rate, with small-cap styles prevailing. For example, the probability of the small-cap index rising between the Spring Festival and the Two Sessions is 100%, and the probability of rising in February is 87.5% II. Industry Allocation Clues in the Latest Financial Reports from China and the U.S. From a strategic perspective, we analyze annual report forecasts more based on cyclical dimensions. Mainly based on the operational positions of various industries in Q3 2025, we focus on four aspects through marginal changes in Q4 2025— 1. Reversal Strategy ①: From a right-side perspective, which industries that have already reached a profit inflection point in Q3 2025 will validate the recovery trend in Q4? 2. Reversal Strategy ②: From a bottom-side perspective, which industries may have reached a profit inflection point in Q4 2025? 3. Reversal Strategy ③: From a left-side perspective, which industries are still under pressure but show signs of demand-side improvement in their financial reports? 4. Prosperity Strategy: In high-growth tracks, which low-position stagnating directions still exist? In addition, we have also conducted some data statistics on the first-level industries of Shenwan. (I) Reversal Strategy ①: From a right-side perspective, which industries that have already reached a profit inflection point in Q3 2025 will validate the recovery trend in Q4? In summary, lithium batteries and storage continue to recover in Q4, mainly driven by AI and energy storage as two β factors. Additionally, there are price increases in segments such as tools. Note: The companies mentioned in this article are for illustrative purposes only, showcasing objective data, not recommendations, and do not represent the views of the industry research team; profit forecasts are all based on Wind's consensus expectations, the same below. Looking ahead, we are optimistic about investment opportunities in the two β factors. On one hand, from the U.S. stock financial reports, storage is currently the strongest industrial trend in AI. On the other hand, if lithium carbonate prices are controllable, the stock prices of lithium battery materials and equipment are also expected to recover towards the fundamentals (which have stagnated since the beginning of the year). (II) Reversal Strategy ②: From a bottom-side perspective, which industries may have reached a profit inflection point in Q4 2025? Relevant industries are mainly concentrated in the computer segment. The profit inflection point in computers partly stems from the continuous contraction of previous expenses and personnel. It is also a form of "capacity clearing" to some extent. This can be viewed through the framework of supply clearing + demand improvement. As of Q3 2025, the number of employees in the computer sector has shown a year-on-year negative growth, with salaries nearly showing negative growth (at historical lows), and the expense ratio continues to decline Looking ahead, under the background where the fundamentals may no longer lag behind, focus on AI application opportunities before and after the Spring Festival. (3) Reversal Strategy ③: Left-side perspective, which industries are still under pressure, but financial reports show signs of improvement on the demand side Currently, the main visibility of demand recovery is in the U.S. manufacturing export chain. Although there are not many annual report forecasts disclosed, from the companies that have disclosed, the Q4 performance of the export chain is likely under pressure. From a β perspective, the main influencing factors are exchange rate appreciation, tariffs, demand, etc. Looking ahead, the latest FY25Q4 U.S. stock financial reports reveal recovery signals in North American manufacturing, focusing on recovery opportunities in the U.S. manufacturing export chain (high-end machinery, engineering machinery, etc.). Current U.S. manufacturing construction spending is at historical lows, while industrial machinery orders have been continuously improving. The latest FY25Q4 North American financial reports show that TI and Caterpillar both mentioned the trend of recovery in North American industrial/manufacturing, driven by data center construction, the IIJA Act, and infrastructure projects. Tesla has also significantly increased CAPEX, reflecting the trend of manufacturing return. Improvement in North American demand can be expected in 2026. (4) Prosperity Strategy: In high-growth tracks, which low-position stagnating directions still exist? Related industries include: overseas computing power, domestic computing power, export α, offshore wind, panels, CXO. Looking ahead, after the annual report forecast game ends, especially focus on the allocation opportunities in overseas computing power and domestic computing power. Recent progress in a series of models + computing power projects in North America shows that industrial transformation is still trending. (5) Summary Reversal Strategy ①: Right-side perspective, which industries that have already seen a profit turning point in 25Q3 will validate the recovery trend in Q4? Mainly driven by AI and energy storage in two β, Q4 lithium battery materials and storage continue to recover. Looking ahead, current North American financial reports indicate that storage is the strongest sub-sector in the industry trend; if lithium carbonate prices are controllable, lithium battery materials and equipment stocks are also expected to reflect the fundamental trend. Reversal Strategy ②: Bottom-side perspective, which industries may welcome a profit turning point in 25Q4? Mainly in the computer sub-sector, with turning points partly stemming from the continuous contraction of previous expenses and personnel. This is also a form of "capacity clearing" to some extent, which can be viewed through the framework of supply clearing + demand improvement. Looking ahead, under the background where the fundamentals no longer lag behind, focus on AI application opportunities before and after the Spring Festival Reversal Strategy ③: From a left-side perspective, which industries are still under pressure, but show signs of demand-side improvement in their financial reports? Mainly the U.S. manufacturing export chain. From the disclosed companies, the export chain's Q4 performance is likely under pressure due to currency appreciation, tariffs, and demand. Looking ahead, current U.S. manufacturing construction spending is at historical lows, while industrial machinery orders have been continuously improving. In the latest FY25Q4 North American financial reports, TI and Caterpillar both mentioned the trend of recovery in North American industrial/manufacturing sectors, driven by data center construction, the IIJA Act, and infrastructure projects. Tesla has also significantly increased CAPEX, reflecting the trend of manufacturing returning. Improvement in North American demand can be expected in 2026. Prosperity Strategy: In high-growth sectors, which low-position stagnating directions still exist? Overseas computing power, domestic computing power, export α, offshore wind, panels, CXO. After the annual report forecast game concludes, particularly focus on the allocation opportunities in overseas computing power and domestic computing power. Recent progress in a series of models + computing power engineering in North America shows that industrial transformation is still trending. Finally, the A-share annual report forecasts have landed, and we are entering a financial report gap period, while the U.S. stock financial report season has just begun. The changes in overseas demand revealed in U.S. stock financial reports, as well as their reflection on A-share stock prices, are worth noting. The table below organizes the disclosure dates of relatively important U.S. companies' financial reports. III. Risk Warning Geopolitical conflicts exceeding expectations have caused global inflation to face significant upward pressure again; Repeated overseas inflation and the resilience of the U.S. economy have resulted in the pace of global liquidity easing being lower than expected (the pace of Federal Reserve interest rate cuts and the decline in U.S. Treasury yields being lower than expected); Domestic growth stabilization policies are weaker than expected, leading to sluggish economic recovery and a decline in market risk appetite. Risk warning and disclaimer The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not consider individual users' specific investment goals, financial conditions, or needs. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this is at their own risk.