Citic Securities: The current industrial capacity cycle is still bottoming out, and individual industries are expected to achieve capacity clearance or capacity expansion first.
Gate.io 4 January news, CITIC Securities issued a document stating that the industrial capacity cycle is essentially driven by the supply-demand pattern and can guide investment direction. The current industrial capacity cycle is still exploring the bottom, and some industries under the midstream manufacturing face significant overcapacity pressure. Certain industries are expected to achieve capacity clearance or capacity expansion first. In this context, there are two types of investment opportunities: industries with imbalanced supply and demand transitioning from capacity clearance to supply-demand balance, and industries with balanced supply and demand maintaining capacity expansion to sustain supply-demand balance. Historical data analysis shows that the supply-demand pattern can guide the direction of future net profit and returns for industries, and inflection points in capacity utilization, capital expenditure, and demand provide forward-looking signals for changes in the supply-demand pattern. Furthermore, based on the supply-demand pattern, strategies for capacity clearance and capacity expansion are constructed by identifying inflection points in the capacity cycle and demand price signals. From 2014 to 31 December 2024, the annualized excess returns of the combination of capacity clearance and capacity expansion relative to the CSI All Share Index were 9.2% and 8.5%, respectively.
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Citic Securities: The current industrial capacity cycle is still bottoming out, and individual industries are expected to achieve capacity clearance or capacity expansion first.
Gate.io 4 January news, CITIC Securities issued a document stating that the industrial capacity cycle is essentially driven by the supply-demand pattern and can guide investment direction. The current industrial capacity cycle is still exploring the bottom, and some industries under the midstream manufacturing face significant overcapacity pressure. Certain industries are expected to achieve capacity clearance or capacity expansion first. In this context, there are two types of investment opportunities: industries with imbalanced supply and demand transitioning from capacity clearance to supply-demand balance, and industries with balanced supply and demand maintaining capacity expansion to sustain supply-demand balance. Historical data analysis shows that the supply-demand pattern can guide the direction of future net profit and returns for industries, and inflection points in capacity utilization, capital expenditure, and demand provide forward-looking signals for changes in the supply-demand pattern. Furthermore, based on the supply-demand pattern, strategies for capacity clearance and capacity expansion are constructed by identifying inflection points in the capacity cycle and demand price signals. From 2014 to 31 December 2024, the annualized excess returns of the combination of capacity clearance and capacity expansion relative to the CSI All Share Index were 9.2% and 8.5%, respectively.