CICC: Performance certainty may be an important clue in the current uncertain environment

People’s Finance Network, April 7 — CICC said that earnings certainty could be an important clue in the current environment of uncertainty. Although the short-term market still has uncertainty, after conditions shift back and forth, market sensitivity may decrease. And after a period of adjustment, the current period may be a relative mid-term low point for China’s A-share market. On a medium-term basis, CICC believes that the macro environment in which the market operates has not undergone fundamental changes, and the logic supporting the A-share market’s “steady progress” still holds. The release of risk and the pullback-driven adjustment are expected to create better opportunities for allocation. In an environment of uncertainty, earnings certainty may become a key clue for where capital flows in the market. It is recommended to focus on main themes with higher levels of industry prosperity and stronger earnings certainty. 1. Growth driven by industry prosperity: industries benefiting from AI technology implementation, such as optical communications; and new energy-related batteries, energy storage, and the like. 2. Cyclical resource stocks: taking into account the position of the capacity cycle, focus on sub-sectors supported by supply-demand dynamics that support price increases and earnings certainty, such as power grids and chemicals. 3. High dividend yields: in stages when risk appetite is lower, there may be relatively better performance, but over the full year it may still be phased and structural performance. Pay attention to alignment with cash flows.