CITIC Securities: Allocation should gradually narrow focus, continuing to concentrate on China's advantageous manufacturing.

MetaMuskRat · 2026-04-07T07:32:48+00:00

People's Finance News, April 7th — CITIC Securities pointed out that the possibility of TACO still exists, but market liquidity patience has been exhausted. The war is expected to approach its end this month, but the increasing likelihood of the Strait of Hormuz being "weaponized" and intermittent disruptions in the supply chain are raising concerns. Currently, among the five fundamental clues (dividends, going overseas, AI, PPI, and domestic consumption), only PPI, domestic AI, and consumption are not fully priced in. After the war subsides, the transmission from oil prices to PPI to corporate profits will be one of the most important fundamental factors. Domestic AI is a relatively independent industry development, while domestic consumption transactions are likely to lag behind PPI transactions. Of course, the "PPI to corporate profits" trade will only begin after the war ends and oil prices peak. During the market cooling process, allocations should gradually shrink and continue to focus on China's advantageous manufacturing.

MetaMuskRat

2026-04-07 07:32:48

People’s Finance News, April 7—CITIC Securities said that while the possibility of TACO still exists, market participants’ patience has been nearly exhausted. It is expected that the war will be nearing its end this month, but the likelihood is increasing for the Strait of Hormuz to be “weaponized” and for intermittent disruptions across the supply chain. At present, among five key fundamental indicators (dividends, overseas expansion, AI, PPI, and domestic consumption), only PPI, domestic AI, and consumption have not yet been priced in sufficiently. After the war calms down, the most important fundamental factor is the transmission path of oil prices → PPI → corporate earnings; domestic AI is a relatively independent industrial shift, while trades related to domestic consumption are likely to lag behind PPI trades. Of course, the “PPI → corporate earnings” trade will only begin once oil prices have topped after the war ends. As the market cools, allocations should gradually narrow, continuing to focus on China’s strengths in manufacturing.

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