Industrial Securities says as July ushers in the U.S.-China earnings season,
relative sector momentum and relative earnings revisions remain the primary
allocation signals. Sectors with strong consensus on AI compute and upstream
materials — notably non-ferrous metals, chemicals and fiberglass tied to AI
demand — could re-enter reallocation after earlier overseas-driven volatility as
Chinese 1H earnings previews arrive. Several companies in memory/storage,
fiber-optic cable, liquid cooling and specialty electronic gases have issued
strong 1H previews, confirming high Q2 AI-chain momentum; further previews from
leading firms could be stronger catalysts. For the North American compute chain
(represented by optical comms and PCB), the prior compute rally narrowed into
storage and has fallen more sharply recently under overseas pressure; the
A-share valuation gap between North America-linked compute leaders and domestic
compute leaders have retraced to June last-year levels, a configuration signal to
watch. Ahead of the U.S. earnings wave in mid-late In July, the market may seek
domestic low-base, quality sectors for catch-up, notably the lithium battery
supply chain, innovative drugs, brokerages, agrochemicals, refining &
petrochemicals, and poultry (broilers).
