Brokerage Morning Meeting Highlights | Optimal Recovery Period for Industries with Superior Performance

Yesterday, the market experienced a volatile adjustment, with all three major indices closing lower. The divergence between the yellow and white lines was evident, and small and mid-cap stocks showed relatively strong performance. The transaction volume in the Shanghai and Shenzhen markets reached 2 trillion yuan. From a sector perspective, concepts related to nuclear power, AI applications, humanoid Siasun Robot & Automation, electricity, and photovoltaics performed actively. On the downside, the storage chip concept underwent a volatile adjustment. By the end of the trading session, the Shanghai Composite Index fell by 0.59%, the Shenzhen Component Index dropped by 0.96%, and the ChiNext Index declined by 1.24%. CICC believes that during the recovery phase, it is advantageous to select industries with strong prosperity; Huatai thinks that the rebalancing value remains intact; China Securities Co., Ltd. believes that North American cloud providers will continue to increase their capital expenditures significantly, and suggests focusing on undervalued computing power and high-dividend targets. CICC: During the recovery phase, prioritize industries with strong prosperity. The market performed poorly in July, influenced by external factors. Concerns over the Federal Reserve's interest rate hikes intensified, and the recurring conflict between the U.S. and Iran, along with a heightened struggle for control over the Strait of Hormuz, led to a short-term rebound in oil prices. In July, the Federal Reserve maintained its policy interest rate, the yield on 10-year U.S. Treasury bonds rose to 4.75%, and the U.S. dollar index fluctuated at high levels. Internally, the cumulative increase and congestion of hot themes in June reached a peak, making liquidity expectations sensitive. After the adjustment, funds were reallocated toward other industries with strong prosperity, such as nonferrous metals, chemicals, new energy, electricity, grid equipment, construction machinery, pharmaceuticals, and dividends. Huatai: The rebalancing value still holds. Since July, market sentiment has noticeably weakened, and the earning effect of growth sectors has rapidly cooled. The adjustment and volatility of the technology index have both amplified, further exposing the vulnerability of previously crowded trades. Funds are reallocating from high-elasticity growth to undervalued, defensive assets; both the trading value and underlying allocation value of the dividend sector have improved, and it is recommended to focus on stable dividend varieties such as banks and utilities. China Securities Co., Ltd.: North American cloud providers continue to boost capital expenditures significantly; focus on undervalued computing power and high-dividend targets. Currently, the prosperity of the AI computing power industry chain remains, but the market has recently undergone a clear adjustment, showing signs of an overshoot. In the future, it is advisable to continuously pay attention to: first, the growth of big model ARR, especially the ARR growth in coding scenarios, as major North American models are currently promoting price reductions; if ARR growth encounters bottlenecks in the short term, it may affect market expectations for future computing power demand; second, the implementation and development of big models in other application scenarios beyond coding; third, the future price trends of computing power inflation chains; fourth, the financing conditions across various segments of the AI industry chain and market risk appetite. This article is reprinted from "Caixin," edited by GMTEight: Li Fo.