As we roll into December, the final trading month of 2024, the market has demonstrated a commendable level of stabilityReflecting on the entire year, the market has undergone two distinct bullish trends in both the first and second halves, with the momentum from the most recent upswing since September 24 still persistingThis sets the stage for January 2025, a pivotal month that serves as a transitional point for future market movements.

So, which investment opportunities are likely to continue thriving? At present, numerous sectors and specific stocks remain poised for substantial upward movement, suggesting a continued performance of "main rising waves." These sectors are anticipated to yield excess returns, and the associated companies have already been included in various institutional gold stock pools for January. The expectations for these sectors are exceptionally high.

December’s market consolidation sets a solid foundation for January's anticipated gains.

Since the initiation of the market rally on September 24, four calendar months have passed

During this period, the indices have generally trended upwards, transitioning from a "fast bull" to a more measured "slow bull" market.

As the closing month of 2024, December's market dynamics have been stable, primarily characterized by a phase of low-volume horizontal consolidation, with a marked decrease in volatility compared to October and November.

Nonetheless, December was not devoid of opportunitiesAnalyzing industry performance until December 30, 18 out of 31 major industries, according to the Shenwan classification, recorded gains, with sectors such as telecommunications, banking, electronics, retail, and automotive leading the charge, all exceeding 4% growth

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The telecommunications sector, in particular, outperformed with a notable 11% increase. The telecommunications industry has the added advantage of favorable trends in popular concepts such as AI, computing power, and optical communicationThis helped it to maintain its leadership position throughout December.

Simultaneously, new opportunities regarding hot topics and themes have been emerging, including areas such as optical modules, AI computing power, Douyin Doubao, PEEK materials, IDC (computing power leasing), new retail, lab-grown diamonds, humanoid robots, and AI applications which have shown strong performanceFurthermore, analyzing the performance across more than 5,300 listed stocks, around 1,000 have experienced gains exceeding 5%.

Recent economic data reveals promising signs

In December, the manufacturing purchasing managers' index, non-manufacturing business activity index, and composite PMI output index have all remained within the expansion zone, indicating an ongoing recovery and positive outlook for the economy.

Given this backdrop, how might the market environment evolve in January 2025?

Historically, examining the market trends for January over the last decade shows a balance of gains and lossesTaking the Shanghai Composite Index as a reference, out of ten years analyzed, it has increased in five years while declining in the othersNotably, January 2023 and January 2018 demonstrated significant increases, each surpassing 5%.

Current sentiment regarding the January 2025 market and the broader annual market outlook is relatively optimistic, suggesting that now is an opportune time to position investment decisions.

Yinhe Securities has indicated that the current "cross-year rally" is timely, advising investors to seize structural opportunities

They suggest that January may see a more positive policy stance, coupled with an overall easing of market liquidity improving expectations for future corporate profitabilityWith various factors supporting the stabilization of capital market expectations, A-shares are poised for a continued upward trend.

Looking ahead to 2025, Haitong Securities anticipates further macro liquidity easing and policy initiatives that may elevate the fundamental outlook, with a potential net influx of capital into the A-share market reaching an impressive 2 trillion yuan compared to 2024.

January's golden stock list reveals various stocks within the “main rising wave.”

Recently, multiple beneficial stimuli have emerged across policy, industry, and sector fronts

This includes initiatives in major consumer goods, state-owned enterprise market value management, cross-border e-commerce, and advancements in AI (Artificial Intelligence) and roboticsInvestment capital appears to be increasingly gravitating towards these related sectors during this period.

Reviewing the performance of the December stock market's golden stocks various brokers targeted mainstream sectors successfully, capturing numerous strong bullish stocks related to trade, chips, AI, and computing power.

For instance, Everbright Securities has seen its recommended stocks such as Yonghui Supermarket, Haiguang Information, and Cambricon Technologies surge more than 20% since December.

In September 2024, Miniso announced a significant acquisition of a 29.4% stake in Yonghui Supermarket for 6.27 billion yuan

Following this announcement, Yonghui's stock price rebounded sharply and is currently in a continuous upward trend.

Both Haiguang Information and Cambricon Technologies operate in the semiconductor space, overlapping with concepts related to computing power and AICurrently, both stocks are moving within a "slow bull" trend.

At this stage, the brokers' selections for golden stocks in January 2025 predominantly surround these trending topicsMore than 100 stocks have been identified for January, leading to a refined selection of 30 that show a positive upward trend.

From a secondary market perspective, many stocks have experienced significant price increases or have breached key resistance levels, indicating they are resting within a "main rising wave" pattern. For example, Magauto specializes in smart home electric controls and power products, with prominent connections to the photovoltaic and wind energy sectors

As of December 31, the photovoltaic industry witnessed a strong rebound, propelling multiple stocks to reach their limit-up priceMagauto's stock price initiated a new upturn following December 16, reaching a historic high recently.

Additionally, a tech leader integrating AI, low-altitude economy, and 5G concepts has also seen an impressive rally, accumulating over 30% since December, reaching a new 18-month peak.

Historically, numerous industries have led the January market.

The golden stock list for January highlighted numerous industries, including electronics, renewable energy, pharmaceuticals, food and beverage, finance, and automotive

Which sectors are expected to lead the market next?

Looking at historical patterns, January markets frequently experience shifts in valuation driven by changes in corporate performance expectations, sector outlooks, and macroeconomic factorsA review of January's sector performance trends reveals some distinct characteristics, including movement toward lower valuations and focus on performance-driven angles. Observations from prior January performances suggest a notable shift in investment strategies.

Analyzing data from January 2017 to 2024, it is observed that several industries frequently appear in the top performers

For instance, the banking sector has ranked among the top five sectors during 6 of the 8 analyzed periods, with notable gains exceeding 7% in January 2024 and 2019.

Moreover, power equipment experienced top five increases in January for 2020, 2021, and 2023, while coal marked similar records in 2018, 2019, and 2024. Other sectors, including nonferrous metals, automotive, computing, and household appliances, have also ranked in the top discussions within two out of the past seven years.

Recently, numerous favorable trends have emerged surrounding the leading industries, such as automotive, which has shown consistent upward momentum since the rally began on September 24. Notably, one influential aspect encouraging auto stocks is the adoption of intelligent driving technology

With industry giants scaling operations, this sector's popularity continues to rise, highlighted by the December 29 launch of Huawei's QianKun smart driving ADS 3.0, emphasizing "parking to parking."

In the computing sector, the recent introduction of domestic AI models and accelerated applications are generating significant excitement, serving as a robust stimulus for the computing industry, critical in data processing and computation.

As we anticipate January 2025, which industries are likely to take the lead? Which stocks recommended by brokers could shine? We will continue to monitor these developments closely.

(The stocks mentioned in this article are merely for analysis purposes and do not constitute trading recommendations.)