The CITIC Securities Research Report points out that after 2022, “rapid structural rotation” of A-shares is the norm. Extremely high rotation speed generally lasts 1 to 2 months. The common denominator behind high-speed rotation is that profit improvement is insufficient in breadth, and a sustainable main line is scarce. Currently, trade frictions are entering a period of high incidence, and the impact of exchange gains and losses is also increasing. Going overseas, as one of the most important performance clues for A-shares, is constrained by valuation restrictions, limiting the breadth of the market, and it is easy to form a rapidly rotating market state in the industry. Breaking the impasse requires new changes. Recent advances in AI have strengthened the existing trend of rapid growth in computing power demand, but they are not enough to change the long-term commercialization narrative. If we see possible new changes such as RSI and anti-distillation in the future, it is expected to open up room for long-term valuation. In the stage of rapid market rotation, most of the winners are “undervaluation” strategies, but only the PB-ROE strategy clearly dominates in a rapid rotation environment, and the yield of the strategy further increases as the rotation speed increases. The momentum strategy is the most damaged strategy during the rapid rotation phase. Under high rotation, market opportunities may be reflected more as valuation repairs with performance support. In terms of configuration, we proposed an “AI+ energy conversion” barbell structure in our mid-term strategy. AI was concentrated in Q2, and energy efficiency may gradually heat up in the future.

The CITIC Securities Research Report points out that after 2022, “rapid structural rotation” of A-shares is the norm. Extremely high rotation speed generally lasts 1 to 2 months. The common denominator behind high-speed rotation is that profit improvement is insufficient in breadth, and a sustainable main line is scarce. Currently, trade frictions are entering a period of high incidence, and the impact of exchange gains and losses is also increasing. Going overseas, as one of the most important performance clues for A-shares, is constrained by valuation restrictions, limiting the breadth of the market, and it is easy to form a rapidly rotating market state in the industry. Breaking the impasse requires new changes. Recent advances in AI have strengthened the existing trend of rapid growth in computing power demand, but they are not enough to change the long-term commercialization narrative. If we see possible new changes such as RSI and anti-distillation in the future, it is expected to open up room for long-term valuation. In the stage of rapid market rotation, most of the winners are “undervaluation” strategies, but only the PB-ROE strategy clearly dominates in a rapid rotation environment, and the yield of the strategy further increases as the rotation speed increases. The momentum strategy is the most damaged strategy during the rapid rotation phase. Under high rotation, market opportunities may be reflected more as valuation repairs with performance support. In terms of configuration, we proposed an “AI+ energy conversion” barbell structure in our mid-term strategy. AI was concentrated in Q2, and energy efficiency may gradually heat up in the future.