Everbright Securities: The market may continue to rebound in the short term, suggesting to focus on three main performance lines

According to the Zhitong Finance APP, Everbright Securities has released a research report stating that the market may continue to rebound in the short term, focusing on three performance main lines. In the short term, the A-share market may continue to rebound. On one hand, the U.S. non-farm payrolls unexpectedly decreased by 23,000 in July, which has cooled market expectations for a Federal Reserve interest rate hike in September, and market risk appetite is expected to recover; on the other hand, recent overseas stock markets, especially the semiconductor sector, have gradually stabilized and rebounded, which has a positive effect on the stabilization of the A-share technology sector.

The concentrated disclosure period for mid-year reports in August is expected to become a turning point for the market to switch from valuation digestion to profit-driven growth, and the earnings season may be the best allocation window for the second half of the year. The current core concern in the market is the sustainability of overseas AI capital expenditures, but at least two rounds of similar debates since 2020 have ultimately been concluded by the next performance data, with each debate accompanied by a 10%-20% pullback in the sector, followed by a recovery in the market within a few months. Currently, both domestic and foreign technology earnings are maintaining high growth, while overall profit growth is continuously rebounding driven by PPI, with the non-financial mid-year report profit growth for the entire A-share market expected to reach around 15%. Coupled with systematic support from policy levels, the gradual easing of disturbances from Changxin's listing, and the continuous decline in A-shares' sensitivity to overseas shocks, the concentrated disclosure period for mid-year reports in August is expected to become a turning point for the market to switch from valuation digestion to profit-driven growth, and the earnings season may be the best allocation window for the second half of the year.

In terms of allocation, it is recommended to focus on three performance main lines. The first is technology hardware (semiconductors/AI computing power/storage), which is the strongest direction for performance improvement in this round; the second is the price increase chain (non-ferrous metals/chemicals/coal), which directly benefits from the rebound in PPI, with high certainty of performance realization; the third main line is export manufacturing (energy storage/power equipment/automobiles), benefiting from global manufacturing inventory replenishment and supply chain advantages. In addition, non-bank financials, pharmaceuticals/CRO (innovative drugs going abroad), and military industry (order turning points) are also worth paying attention to in terms of mid-year report prosperity, presenting a pattern of multiple performance main lines running in parallel.

Risk Analysis: Historical patterns may fail; market sentiment may significantly decline; economic growth levels may fall far short of expectations; the situation in the Middle East may continue to escalate