CMSC has released a research report suggesting that after a short-term shock, investors should focus on the dual themes of technology sector recovery and interim earnings performance. The market's significant adjustment following Meta's reported sale of computing power is not a signal of an oversupply in computing resources, but rather an inevitable choice to enhance asset returns during a high capital expenditure phase. The industry is currently transitioning from a phase of pure Capex expansion to one of ROIC validation, not entering a stage of computing power surplus. The recent market adjustment is primarily due to substantial gains in the broad computing power sector, amplified volatility from leveraged funds, and pessimistic narratives easily triggering short-term negative capital feedback—a pattern seen previously with multiple AI bubble discussions and Apple price adjustments. However, after this liquidity shock, the firm believes the industrial trend of AI remains unrefuted. The supply-demand gap for memory chips persists, the price increase for MLCCs continues, and the shortage of indium phosphide remains unchanged, indicating a potential recovery for the technology sector.

Beyond the technology direction, investors can also moderately focus on sectors where interim earnings and stock prices are misaligned. The firm notes that stock performance since July has not been proportional to corresponding earnings results, with pricing based on interim earnings forecasts forming distinct layers. The market is primarily focused on the alignment between interim earnings and current valuation levels: 1) Sectors in low-expectation, low-valuation, and low-positioning ranges often exhibit higher recovery elasticity if interim reports confirm profit improvement; 2) For sectors in high-expectation, high-crowding, and high-gain ranges, even continued high growth in interim reports may have a diminished marginal positive impact on stock prices, potentially turning them into windows for realizing staged gains instead. Subsequently, attention can continue on sectors such as lithium battery materials, innovative drugs, certain resource products, fluorochemicals, and aquaculture that feature "low valuations + verifiable interim reports + potential for further upward revisions post-interim reports." The main views of CMSC are as follows:

The A-share market experienced volatile differentiation this week, primarily due to: (1) U.S. June non-farm payroll data falling significantly below expectations, easing market concerns about further short-term Fed rate hikes and marginally alleviating overseas liquidity pressures; (2) Reports of Meta considering launching AI cloud services and selling excess computing power triggered a market reassessment of AI infrastructure supply-demand and investment returns, leading to adjustments in the previously high-performing AI hardware chain; (3) The pharmaceutical sector saw strengthened low-position recovery logic, catalyzed by expectations for innovative drug出海 (overseas expansion) and advancements in medical insurance and commercial insurance innovative drug catalogs; (4) Continuous发酵 (fermentation) of expectations for Unitree's上市 (listing), combined with accelerated industrialization progress in humanoid robots, drove阶段性 (periodic) activity in related robotics sectors.

Industrial enterprise profits in May continued their improving trend, and Japan's semiconductor manufacturing equipment shipment value showed a year-on-year recovery. Areas with improved景气 (prosperity) this week mainly include: 1) Among resource products, prices for most metals like copper, tin, and zinc rose, with inventories generally declining; 2) In the new energy industry chain, lithium carbonate prices increased, and the year-on-year growth rate for CNC metal forming machine tool production in May expanded; 3) The TMT sector maintained high景气 (prosperity), with DDR5 prices continuing to rise, the three-month rolling year-on-year change for May smartphone shipments turning positive, and the three-month rolling year-on-year growth rate for Japan's semiconductor manufacturing equipment shipment value in May expanding. The report recommends semiconductors, components, communication equipment, non-ferrous metals, batteries, automation equipment, and securities, which are expected to show high growth or improvement in interim earnings.

Margin financing saw net inflows and ETFs recorded net subscriptions, while fund issuance rebounded. Margin financing funds recorded a net inflow of 109.5 billion yuan over the first four trading days; newly established equity-oriented public funds amounted to 15.71 billion units, an increase of 7.91 billion units from the previous period; ETFs saw net subscriptions, corresponding to a net inflow of 22.03 billion yuan. Margin financing funds were net buyers in electronics, non-bank finance, and media; information technology ETFs saw significant subscriptions, while new energy & smart vehicle ETFs experienced larger redemptions. Net减持 (reduction) by major shareholders decreased in scale, and planned减持 (reduction)规模 (scale) declined.

Fluorochemicals are experiencing multi-theme共振 (resonance). The fluorochemical sector has continued to strengthen recently, with the core logic being that supply constraints and improved demand structure jointly推动 (push) the price中枢 (center) upward. On the supply side, constraints exist in fluorine resource mining, safety and environmental supervision, and the pace of new capacity release, providing strong support for upstream raw material prices, which is gradually transmitting downstream; simultaneously, after core products like refrigerants entered a quota management phase, industry supply elasticity decreased. On the demand side, traditional air conditioning, refrigerators, and cold chain需求 (demand) form a fundamental base, with recent air conditioning production scheduling, export demand, and automotive thermal management upgrades supporting refrigerant consumption; additionally, emerging applications in semiconductors, lithium batteries, new energy, and AI data center liquid cooling are continuously expanding, driving the industry's demand structure towards higher value-added products, increasing demand for high-value products like electronic-grade hydrofluoric acid.

The overall valuation level of A-shares increased this week compared to last week. The PE (TTM) of the Wind All-A Index was 18.7, up 0.04 from last week, standing at the 82.3 percentile of historical valuation levels. Index valuations showed mixed performance this week, with pharmaceuticals & biotechnology, national defense & military industry, and beauty & personal care leading gains, while electronics, building materials, and communications led declines.

Risk提示 (hints): Economic data falling short of expectations, incomplete policy理解 (understanding), overseas policies tightening beyond expectations.