Sinolink: A-share tech stocks are at a disadvantage amid the tech narrowing, and gold is ushering in an allocation opportunity.

Sinolink released a research report stating that from a global investment perspective, holding a portfolio of US AI tech stocks plus gold may serve as a hedge. However, for domestic investors, A-share tech stocks are at a disadvantage amid the tech narrowing, and at this point, the energy sectorwhich has lower sensitivity to interest rates and dividend attributesbecomes a better substitute. Gold is the dominant asset for the next scenario, while what can be sought now is the energy chain where demand has low sensitivity to interest rates and the supply side has undergone significant changes. Based on this, the bank recommends focusing on: First, the energy and chemical chain represented by oil, oil shipping, and coal will continue to benefit from global restocking demand for energy, while also being assets with dividend attributes. Second, against the backdrop of a slowing trend in the AI industry and diverging fundamentals, combined with a sharp pullback in October rate hike expectations, the suppression from real interest rates is gradually easing, and gold is ushering in an allocation opportunity. Sinolink's main viewpoints are as follows: Behind the divergence between Chinese and US tech stocks: valuation convergence under suppressed fundamental expectations Recently, the performance of Chinese and US tech stocks has shown a clear divergence. The direct trigger behind this is concerns about future fundamentals caused by potential sanctions risks represented by the US FCC, which has suppressed valuations, accompanied by the amplification effect of still-crowded domestic trading structures. At present, after significant adjustments in A-share tech stocks, stock prices/valuations have somewhat reflected investors' concerns about the future fundamentals of A-share tech stocks, but it is hard to say they have fully priced in: A-share tech stock valuations are still not cheap enough, and are even still higher than US stocks: (1) From their own valuation levels, the PE TTM valuation percentiles of growth sectors represented by optical modules, PCB, and computing power chips are still above 60%, while PB valuation percentiles are even higher, all still above 85%. Although dynamic valuations may be reasonable and ROE levels have already improved at present, this also means higher requirements are placed on future fundamental assumptions, and the basis for these assumptions is facing various uncertainties. (2) Compared with US stocks: current A-share tech stock valuations are still higher than US stocks, with PB slightly higher and PE far higher. From a sub-sector perspective: the PB valuations of A-share optical modules/PCB are still far higher than US stocks; the PE valuation of A-share AI chips is far higher than US stocks. The extreme scarcity and prosperity of Chinese tech stocks relative to the A-share market internally was the driving force behind their past excess returns and faster valuation increases; but during the global tech narrowing period, it has also become a hidden concern for future performance from the perspective of horizontal comparison among global tech stocks. Two future directions for the US AI investment cycle Currently, US stocks are also beginning to face their own problems after reaching new highs: earnings are starting to diverge due to differences in calculation standards, represented by OPEN AI's revenue ($50 billion VS $70 billion). Although optimists and pessimists each hold their own views, what is clear is that the future performance of US AI tech stocks also faces significant uncertainty. The bank discusses scenarios: First, if the fundamentals of US tech stocks are confirmed to be fine, stock prices will return to strength. For A-shares, the bank believes there may also be a recovery after the sharp decline, but the extent will not be too large, and it will likely be weaker than US stocks. The reasons are as follows: (1) The fundamental mapping relationship between Chinese and US tech stocks has weakened. The core reason behind this is that US tech stocks have shifted from siphoning global investment capital to profit redistribution after focusing on future returns, directing profits from the global AI industry chain back to the US to support longer-term investment needs. This is an inevitable choice in a scenario where overseas profit retention is scarce. Therefore, although the FCC has not yet taken effect, as long as it has not, it will continue to suppress fundamental expectations for Chinese sectors entering the US industry chain, represented by optical modules. (2) Trading-level issues have still not been fully digested. This Friday (2026-10-09), A-share tech stocks showed a clear rebound after the sharp decline, mainly due to ETF/market stabilization funds entering to support the market, because the margin guarantee ratio has returned to near previous lows, and the necessity for market stabilization is rising. But even so, the concentration of mutual fund holdings plus contrarian operations is the biggest factor constraining the rebound: since the end of July, during the weak rebound in tech stocks, mutual funds have shown obvious contrarian operations in the electronics and communications sectors that were heavily overweight in Q2, namely reducing positions during rebounds and slightly adding during declines. Second, if the fundamentals of US tech stocks also run into problems, under a downward trend in US tech stocks, A-share tech stocks may find it even harder to remain unaffected. In this case, the siphon effect of US AI on global capital will decline, upward pressure on real interest rates will ease, and combined with a sharp pullback in October rate hike expectations, pressure from rising nominal rates will also ease somewhat. At this point, the allocation opportunity for gold may instead arrive. Therefore, from a global investment perspective, holding a portfolio of US AI tech stocks plus gold may serve as a hedge. However, for domestic investors, A-share tech stocks are at a disadvantage amid the tech narrowing, and at this point, the energy sectorwhich has lower sensitivity to interest rates and dividend attributesbecomes a better substitute. Domestic demand: a potential hedge option, with positive short-term changes but also concerns Against the backdrop of high overseas interest rates plus the China-US tech divergence, in addition to energy plus gold, for investors who do not want to leave or cannot leave the market, domestic demand is also a potential hedging area: (1) On the one hand, after years of continuous adjustment, the dividend yield of the consumer sector has become quite considerable, and even some sub-sectors have dividend yields that have surpassed banks. (2) On the other hand, policy has also been actively stepping up recently: this Friday, the Ministry of Finance set the tone to "increase the intensity of countercyclical adjustment and step up efforts to expand domestic demand," and it is expected that infrastructure physical work volume will accelerate in Q4, providing some support for domestic demand. However, domestic demand currently also faces some concerns: September PMI data show strong supply and weak demand, and the real weakening may not be over, which constrains the sustainability of stock price performance. Allocation approach under a comprehensive defensive mindset Since the bank proposed active defense, the market has clearly cooled; since the bank proposed comprehensive defense, the market temperature has further declined. The difference between active defense and comprehensive defense lies in: the former recognizes market risks but is still looking for assets with excess returns; the latter is asset allocation primarily aimed at preventing downside risks. For overseas investors, holding US tech plus gold can still achieve effective hedging, but this does not hold for domestic investors. Gold is the dominant asset for the next scenario, while what can be sought now is the energy chain where demand has low sensitivity to interest rates and the supply side has undergone significant changes. Based on this, the bank recommends focusing on: First, the energy and chemical chain represented by oil, oil shipping, and coal will continue to benefit from global restocking demand for energy, while also being assets with dividend attributes. Second, against the backdrop of a slowing trend in the AI industry and diverging fundamentals, combined with a sharp pullback in October rate hike expectations, the suppression from real interest rates is gradually easing, and gold is ushering in an allocation opportunity. Risk warnings: continued escalation of geopolitical conflicts; major breakthroughs in the AI industry trend.