--- title: "CICC: What to Buy During the Expected Stabilization Phase?" type: "News" locale: "en" url: "https://longbridge.com/en/news/293988852.md" description: "A CICC research report points out that A-shares have stabilized at low levels after a correction, with pessimistic expectations largely released. As industrial trends shift, upstream materials such as gold, copper, tin, and aluminum are expected to strengthen due to supply-demand dynamics and demand pull, while steel and construction materials remain constrained by domestic demand. CICC believes that positive market factors are accumulating and the volatile upward trend will continue, suggesting investors focus on niche sectors where opportunities have emerged from the decline" datetime: "2026-07-28T00:51:25.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293988852.md) - [en](https://longbridge.com/en/news/293988852.md) - [zh-HK](https://longbridge.com/zh-HK/news/293988852.md) --- # CICC: What to Buy During the Expected Stabilization Phase? A-shares have recently stabilized at low levels, with trading volume shrinking. Last week, the Shanghai Composite Index stabilized after hitting a new low for the year, rising +1.33% for the week. The CSI 300 rose 2.65%, while the ChiNext Index and the STAR 50 Index gained +1.52% and +4.19%, respectively. Although volatility persists, overall market sentiment has eased. Trading volume decreased by another CNY 140 billion compared to the previous week. Margin financing balances, which had been declining rapidly since early July, have remained relatively stable in the past week. Pessimistic expectations from earlier periods have been largely released. We believe the market has already priced in overly pessimistic expectations, while positive factors are accumulating. There is no need to be overly cautious about the future performance of A-shares; the volatile upward trend seen since September 24 is expected to continue. **What to Buy During the Expected Stabilization Phase? Combining Bottom-Up Analysis from CICC Industry Analysts** Following the correction since mid-May, most company stock prices have experienced significant drawdowns. As of July 26, the median year-to-date return for A-share listed companies has dropped to -21.0%, with many companies now revealing opportunities that have "emerged from the decline." Based on current industrial trends, we have summarized recommendations from CICC industry analysts and identified niche sectors worth attention at current levels for investor reference: **► Upstream Materials: Multiple non-ferrous metal sectors offer expected return potential.** Gold: As US inflation expectations ease, the upside potential for gold prices may open up, and the gold industry is currently at historical valuation bottoms. Copper: Supply remains tight, and expectations of US copper tariffs persist alongside the arrival of the peak autumn season. Against the backdrop of low copper inventories outside the US, copper prices are expected to remain strong. Tin: Demand for AI computing power is driving accelerated growth in tin solder demand. Aluminum: The prolonged conflict between the US and Iran extends expectations of supply contraction in the Middle East for the year. Accelerated destocking domestically, combined with the peak autumn season, suggests aluminum prices may stabilize and rebound, with per-ton aluminum profits potentially widening again. Tungsten: Emerging industries such as AI and data storage are expected to strongly drive global tungsten demand, leading to potential volume and price increases for leading tungsten companies. In contrast, sectors such as steel and construction materials may continue to be constrained by insufficient domestic demand and weakness in the real estate sector. **► Midstream Manufacturing: Some industries may also benefit from growing demand in the technology sector and capacity clearance.** 1) Photovoltaics (PV): As one of the main beneficiaries of efforts to curb excessive internal competition, the main PV industry chain is expected to enter a rebound channel in the third quarter. Additionally, the increasing proportion of high-efficiency, low-cost module products from leading enterprises is helping some companies reduce losses. 2) Power Grid Equipment: Benefiting from resonating prosperity both domestically and internationally. On one hand, domestic grid investment during the "15th Five-Year Plan" period is projected to reach CNY 5 trillion \[1\], offering high certainty for long-term growth. On the other hand, overseas AIDC and new energy infrastructure are driving demand for power equipment. Chinese power equipment manufacturers, with their short delivery times, high cost-performance ratio, and quality service, are poised for rapid order growth. 3) Transportation: Express delivery services benefit from reduced internal competition, while oil tanker shipping valuations have become relatively low after previous adjustments. 4) Machinery: Certain areas are driven by technology-related demand. For example, gas turbines benefit from data center demand. Valuations in the liquid cooling sector are relatively low within the technology track. As Nvidia accelerates mass production of Rubin, the performance and orders of leading companies may begin to accelerate in the third quarter. Commercial aerospace benefits from multi-faceted support in technology, policy, and capital. Furthermore, earnings expectations for construction machinery are favorable for the second half of the year, and agricultural machinery is also expected to see an earnings turnaround, accompanied by currently low valuations and high dividend yields. 5) Automobiles: Domestic demand for heavy trucks is stable, while exports and the increasing penetration rate of new energy heavy trucks are expected to bring structural opportunities. **► Downstream Consumption:** 1) Food and Beverages: The penetration rate of frozen foods and healthy instant beverages is expected to rise, and the animal husbandry sector is likely to benefit from an improving capacity cycle. 2) Pig Farming: Current valuations are low, and the peak of supply pressure has passed. Pig prices are expected to maintain a mild upward trend. 3) Pharmaceuticals: The industrial trends for innovative drugs and CXO (Contract Research/Manufacturing Organizations) are positive. Recent corrections were mainly due to liquidity factors rather than fundamentals. The global academic conference ESMO in the oncology field is scheduled for October \[2\], where a new round of dense clinical data on Chinese innovative drugs is expected, potentially providing new catalysts for innovative drugs and their upstream supply chains. **► TMT Sector: AI remains the core theme of current attention; closely monitor industrial trends.** Overseas leading companies began disclosing their earnings in late July, attracting high market attention. 1) Hardware: Memory expansion orders strengthened month-on-month; downstream CSP/intelligent computing orders for domestic chips are robust; PCBs continue to iterate with server and switch upgrades, with leading companies showing clear advantages. The proportion of optical modules and NPO modules in data centers is expected to continue rising, and head companies will maintain high profit margins against the backdrop of accelerated industry iteration. 2) Software: Demand for AI Infrastructure is strengthening, with relatively certain industry prosperity. 3) Gaming: The number of products officially launched or tested during the summer vacation is increasing, and forward-looking earnings and previews for A-share gaming companies in 2Q26 maintain high prosperity. **► Financial Sector:** 1) Banks in the Jiangsu-Zhejiang and Sichuan-Chongqing regions: Regional economies are active, with fast scale growth and stable asset quality. Improved liability costs support the stabilization of net interest margins. 2) Securities Firms: The sector has significant room for valuation repair based on fundamentals. Optimization of the industry competitive landscape is showing initial results, and the central ROE of high-quality leading securities firms is expected to rise. 3) Insurance: As market risk appetite decreases, insurance may see a return of funds, and valuation repair is expected to continue. Chart 1: Sectors to Watch for the Second Buying Opportunity of the Year Source: CICC Research Department Risk Warning and Disclaimer The market carries risks; invest with caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. 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