Essence of Securities Morning Meeting | After cooling down of fund competition, it is necessary to focus on the repair of some non-AI sectors.

Last Friday, the market experienced volatile adjustments, with the Growth Enterprise Board and the ChiNext 50 Index both soaring and then plummeting. The divergence between the Huang and Bai lines was apparent, with the performance of heavyweight stocks being weaker. Trading volume significantly increased, with the turnover in the Shanghai and Shenzhen markets reaching 3.39 trillion yuan. In terms of sector performance, the pharmaceutical sector showed relative strength, the Siasun Robot & Automation sector was active, and there was a surge in AI applications during trading hours. On the downside, the semiconductor equipment, energy storage, lithium mining, and electronic special gas sectors experienced volatile adjustments. At the close, the Shanghai Composite Index fell by 1%, the Shenzhen Component Index fell by 2.29%, and the Growth Enterprise Board Index fell by 4.37%. At today's brokerage morning meeting, CITIC SEC believes that after a decline in fund competition, attention should be paid to the recovery of certain non-AI sectors. China Securities Co., Ltd. believes that the reason for the market correction is the supply-demand divergence, but the long-term power shortage situation in North America will become clearer in the second half of the year. Fangzheng Strategy believes in maintaining patience, as the market is expected to turn the tide and continue to focus on three areas of investment opportunities. CITIC SEC: Attention should be paid to the recovery of certain non-AI sectors after a decline in fund competition. Three narrative logics correspond to three layers of K-shaped differentiation, with differentiation reasoned from differences in economic conditions being common in global markets but also affected by emotions and fund flows. Since June, domestic AI stocks have been strong compared to overseas markets, with a strong K-shaped trend. This includes industrial narratives and possibly the impact of quantitative strategy reallocation, with some quantitative stock selection and index enhancement strategies needing reallocation under excessive pressure and fund pressure, by increasing exposure to factors similar to "entrepreneurial creation" to alleviate negative excess, and subjective long positions on Growth Enterprise Board core stocks are significantly stronger in positioning and pricing compared to core components of Sci-Tech Innovation Board which are dominated by ETFs, resulting in a greater push for the Sci-Tech Innovation Board during the reallocation process. Since June, more and more public offering enhanced products have been transitioning from continuous negative excess to positive excess, proving that this reallocation is gradually progressing. Overall, the K-shaped differentiation in the domestic market is intertwined with too many short-term narratives and fund impacts, and after a decline in fund competition, attention should be paid to the recovery of certain non-AI sectors. China Securities Co., Ltd.: Supply-demand divergence is the reason for the correction, but the long-term power shortage situation in North America will become clearer in the second half of the year. Theoretical calculations show that there will be a need to fill a power gap of 14GW, 20GW, and 20GW in 2026, 2027, and 2028 respectively; the month-on-month increase in overseas gas turbine prices (including EPC) in Q1 is direct evidence of supply-demand tension; production scheduling shows that from 2026 H2, overseas gas turbine orders are expected to be scheduled beyond 2030, at which point domestic electricity shortage chain orders will increase long-term visibility, and may usher in a sector-level market upturn with long cyclical valuation switching. Fangzheng Strategy: Maintain patience, market profit effects are expected to turn the tide, focus on three areas of potential investment opportunities. Focus on opportunities to layout HALO assets at low points, with the pressure of high oil prices easing, U.S. inflation trending down from its peak, and fears of rate hikes easing, entering Q3 presents an opportunity for price increases. Core resources (non-ferrous metals + chemicals) may present good buying points if they experience a second dip, and China Securities Red-Chip Index, which has a significant advantage in dividend yield and large adjustment amplitude, has good potential for value allocation. Continuing to watch the brokerage sector which has been adjusting for a long time, negative pressures have been basically lifted, and there are certain catalysts; in the AI theme, after the adjustment, focus on overseas core targets in computing power and domestically strong semiconductor equipment with clear economic certainty, relatively low-position AI applications also have allocation value. Additionally, during a stage where profit effects improve, consider the recovery of thematic stocks, focusing on commercial spaceflight, Siasun Robot & Automation, and other directions resonating with policies and news. This article is reprinted from "Cai Linsh". GMTEight Editor: Xu Wenqiang.