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

K-LinePoet · 2026-04-07T02:21:08+00:00

CITIC Securities believes that the possibility of TACO exists, but market patience has been exhausted. The war is expected to be nearing its end, and the situation in the Strait of Hormuz remains unstable. Factors such as oil prices, PPI, and corporate earnings are interrelated. Currently, the market should focus on China's competitive manufacturing advantages.

K-LinePoet

2026-04-07 02:21:08

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CITIC Securities said that the possibility of TACO still exists, but market participants’ patience has been used up. The war is expected to be nearing the end of this month, but the likelihood of the Strait of Hormuz being “weaponized” and intermittent disruptions to the supply chain is increasing. At present, among the five fundamental indicators (dividend, going global, AI, PPI, and domestic consumption), only PPI, domestic AI, and consumption have not been priced in sufficiently. After the war calms down, the most important fundamental factor among them is the transmission chain of oil prices → PPI → corporate earnings. Domestic AI is a relatively independent industrial change, while trades involving domestic consumption are likely to lag behind PPI trades. Of course, the “PPI → corporate earnings” trade will only begin once oil prices after the war have topped out. As the market cools, positioning should gradually narrow its focus, continuing to concentrate on China’s manufacturing advantages. (People’s Finance and News)

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