CITIC Construction Investment: The TMT and cyclical sectors are showing a high prosperity and high profitability structure, and computing power is still the main theme of the first quarter report.

CITIC Securities Research Report pointed out that in terms of industry layout, the first quarter performance disclosure shows that the TMT and cyclical sectors are in a high prosperity and high profitability pattern, which is worth continued attention. Looking at specific sectors, computing power remains the main theme of the first quarter, and is spreading from core hardware storage chips, optical modules, and PCBs to liquid cooling, computing power leasing, power supply, and other "computing power +" segments. Benefitting from the explosive growth in demand for AI computing power center storage, the lithium battery industry is experiencing a new structural incremental demand, with representative stocks in its industry chain performing well in the first quarter, and the sector's upward momentum continuously extending to the entire industry chain. The prosperity of the innovative drug sector has been confirmed by both performance and trading ends, with BD cooperation normalized and the industry's pace of going global continuing to accelerate. The global storage chip industry is still facing supply shortages, with the leading company SK Hynix achieving a historical high in the first quarter report, and A-share related companies benefiting significantly.