CITIC Securities: Steadfastly focusing on re-evaluating the pricing power of China's advantageous manufacturing, price increase remains a core trading clue.

On March 15th, the latest research report from CITIC Securities pointed out that, from the perspective of the index, there is limited room for further valuation repair. The key to the next stage of the A-share bull market is the recovery of corporate profit margins. The disruption of the global supply chain once again brings an opportunity to test China's pricing power in the manufacturing sector. From the perspective of style, the Middle East conflict is the catalyst for style switching this year. Against the backdrop of rising global costs and weakening financial conditions, low valuation and pricing power are the two most important factors. From the perspective of industrial trends, code expansion and physical scarcity, manifested in China as the improvement of pricing power in the manufacturing industry, disruptive innovation in AI acceleration, and disruption of the global supply chain are all strengthening this trend. In terms of allocation, it is recommended to focus on overweight layout around China's advantage in manufacturing pricing power, with price increases still being the core trading signal and increasing exposure to undervalued factors.