CITIC Securities: AI Gains Concentrated in Q2, Energy & Chemicals May Gradually Heat Up Next

CITIC Securities research report (August 30) noted that after 2022, "structural rapid rotation" has become the norm in A-shares, with extremely high rotation speeds typically lasting 1-2 months, driven by a common underlying factor: insufficient breadth of earnings upgrades. Currently, with frequent trade frictions and amplified impacts from exchange rate translation gains/losses, "going global" earnings momentum faces valuation constraints, limiting market breadth and easily fostering rapid sector rotation. Recent AI advancements have strengthened computing power demand, but are insufficient to alter long-term commercialization narratives; only new developments such as RSI or distillation-prevention technologies could open up long-term valuation headroom.

The report states that during rapid rotation phases, winners are mostly "low-valuation" strategies, with only the PB-ROE strategy significantly outperforming in such environments, and strategy returns strengthening as rotation speed increases; momentum strategies suffer the most damage, as under high rotation, market opportunities are more likely to manifest as valuation repairs for stocks with earnings support. CITIC proposes a medium-term "AI + Energy & Chemicals" barbell structure: AI gains concentrated in Q2, while energy and chemicals may gradually heat up next.

[TechFlow]