CITIC Securities: The endogenous momentum for profit growth will still be concentrated in new growth driver sectors.

CITIC Securities pointed out that from January to August 2026, industrial enterprise profits grew 15.7% year on year; in August alone, profits rose 4.2% year on year, mainly due to the high base effect from the same period last year, but gross profit for the month increased 7.5% year on year, 1.9 percentage points faster than the previous month, indicating that profit quality did not weaken along with the aggregate. Structurally, profits in the electronics industry grew 1.1 times year on year, contributing more than 60% to the profit growth of all industrial enterprises above designated size, with the boom spreading along the computing power chain to PCB, optical fiber cable, electronic specialty materials, and other segments; profits in high-tech manufacturing rose 54.7%, accelerating against the trend. Raw material manufacturing grew 47.3% on support from international commodity prices. Looking ahead, the endogenous momentum for profits will remain concentrated in new growth driver sectors, and under the supply-strong, demand-weak pattern, aggregate elasticity will be limited. For interest rate bonds, the current fundamental mix is neutral to slightly bullish; on the equity side, it is advisable to focus on sectors with high profit growth and relatively low valuations.