The semiconductor sector, once ignited by the National Big Fund Phase III, appears to have cooled again, shifting the market's focus to the underperforming new energy sectorIs the weight of the National Big Fund insufficient? Clearly not, as Phase III is expected to amass a scale larger than the combined total of its two predecessorsThe underlying issue seems to be the prevailing caution within the current market, which favors rapid rotations over stability.

In light of this vibrant yet unstable market, let’s delve into two pivotal inquiries:

1. What are the investment strategies for a rotating market?

The current A-share market, characterized by its rotation, feels akin to a game of "musical chairs." One day, dividend-paying stocks soar, the next it's tech stocks, followed by growth concepts

Each sector presents its profits, but typically, when one sector surges, others remain stagnantHolding steadfast to a singular strategy will eventually yield benefits, but the real fear lies in style drift—a frenzied chase for gains leading to being perpetually out of favored sectors over several months.

In such erratic markets, if one cannot pinpoint ultra-short trading opportunities accurately, following “slow bull” stocks may be a more secure avenue.

Why such an assertion? In secondary markets, irrespective of where the spotlight shifts, there’s typically a group of stocks gradually appreciatingThis situation starkly contrasts with the volatile spikes driven by hot trends

• The Fed's Unwilling Compromise
• U.S. Debt Ceiling Crisis
• U.S. Tech Stocks Surge Again
• Characteristics of PMI
• Wind Power Demand Set for Surge

In essence, those companies are predisposed to sustained growth, displaying certain commonalities.

Currently, there are 18 stocks exhibiting a continuous upward trend for at least 100 days, primarily from traditional industries like coal, non-ferrous metals, and banking. Previously, we've discussed the continuous upward trend duration—defined as the number of days in an upward channel where both the DAY and EMA indicators are positive or the 5-day average exceeds the 10-day and 20-day averages, thereby contributing to the calculation of the channel duration.

The logic of the stock market parallels many phenomena in our daily lives

We know that airplanes must slowly taxi, gain speed, and take off; similarly, long jumpers require running startsLikewise, before the main players elevate stock prices rapidly, they engage in a “run-up” phase, allowing the price to ascend steadily within an upward channel before making a sudden upward leapThe longer this channel remains vigorous, the better prepared the main players are for a breakout.

Reviewing the financial reports of these 18 companies over the past three years reveals their generosity towards shareholders, with many being high-dividend stocksThe cumulative dividend payout ratio over three years (i.e., total dividends divided by the average annual net profit) exceeds 100% for most, peaking at 264.8% for Fuanna and 258.56% for China Shenhua.

The high dividend sector has been strongly recommended by analysts since last August, and it continues to be pushed aggressively

Analysts state, “If you still believe that high dividends are merely short-term trading opportunities or suitable only for the wealthy, you should reconsider your strategy, as this mindset will prevent achieving superior returns.”

Although high-dividend stocks have generally experienced substantial appreciation this year—e.g., Xinjie Energy has soared over 90%—investors may feel apprehensive about “chasing” these stocks.

Nonetheless, based on these companies' most recent fundamental performances, many research institutions conclude that several stocks still possess significant upward potential

For example, the stock with the highest projected increase is Binhua Coat 84%, followed by China Communications Construction and Qibin Group at 68.28% and 66.02%, respectively.

For Binhua Co., Haitong Securities lists the reasons for its anticipated growth as successful project advancements, alongside significant breakthroughs in the development of hydrogen fluoride and hydrochloric acid, forecasting net profits of 420 million, 557 million, and 935 million yuan for 2024, 2025, and 2026 respectively, with corresponding earnings per share of 0.20, 0.27, and 0.45 yuan, based on comparable company valuations estimating a price-to-book ratio of 1.2-1.3 times, suggesting a reasonable value range of 6.90 to 7.47 yuan.

China Communications Construction is receiving high praise from Guolian Securities due to improved profitability and rapid growth in new orders

The company is a front-runner in China's infrastructure construction abroad, likely to benefit from “Belt and Road” projects; furthermore, the continuous breakthroughs in new fields and urban development in China offer promising growth and quality prospects.

Given the lengthy bullish trend of these stocks, their performance is undeniably the result of collective investment efforts, making significant sell-offs unlikely unless fundamentals deteriorate drasticallyIt's reminiscent of Moutai on February 18, 2021—adjustments occurred, but it was still challenging to witness falls.

For instance, in China Communications Construction, a look at the largest shareholders at the beginning of this year reveals that aside from the largest stakeholder, all others consist of institutional investors, including national funds, public offerings, and cross-border investments, with many increasing their holdings compared to the end of last year.

Although there is only one Moutai in the A-share market, and no one can replicate or match its status, other solid companies with high dividends can still “enjoy the feast” of growth.

(The stocks mentioned are for example analysis and do not constitute investment recommendations.)