CITIC Construction Investment: The recovery market for the technology sector is expected to begin.

CITIC Construction Investment Securities stated that the A-share technology sector has recently undergone a deep adjustment influenced by global technological interconnections, showing a gradient path where the second- and third-tier stocks lead the decline and the core leaders follow. The adjustment is considered relatively sufficient. This round of adjustment is mainly driven by leveraged funds selling, rather than a disruption of industrial trends. Overall, the indiscriminate panic selling phase is very likely over, and a corrective market phase is expected to begin. Looking ahead to August, four key signals indicate that the pressure on liquidity is starting to ease: first, the most intense phase of deleveraging in South Korea has passed, and the storage sector has stabilized first; second, concerns about internal liquidity in A-shares have largely settled, with significant alleviation of trading congestion; third, events such as the U.S. Federal Reserve's policy meetings have passed, reducing uncertainty; fourth, the market is beginning to re-price good performance positively. The supplementary declines of core leaders usually signal the tail end of an adjustment. As both second- and third-tier stocks and core leaders complete their risk release, the short-selling momentum in the sector is clearly waning, and the market pricing logic is shifting back to fundamental performance, making a corrective market phase likely to begin. In terms of industry allocation, it is important to focus on core assets in computing that have undergone sufficient adjustment and have high performance certainty, as well as sectors benefiting from global semiconductor capital expenditures. Additionally, pay attention to rising prices in non-ferrous metals, the profit recovery in the new energy sector, and the machinery sector.