China International Capital Co said external narratives driving the market remain short-term and stage-specific, and the A-share recovery that began in late July is likely to continue. Market volatility has risen from external shocks; dividend-yielding stocks outperformed on the 19th. As risk appetite gradually recovers and the earnings peak approaches, focus on areas and companies with higher earnings certainty. Two main themes: 1) Selective growth exposure in technology: post-correction crowdi

China International Capital Co said external narratives driving the market remain short-term and stage-specific, and the A-share recovery that began in late July is likely to continue. Market volatility has risen from external shocks; dividend-yielding stocks outperformed on the 19th. As risk appetite gradually recovers and the earnings peak approaches, focus on areas and companies with higher earnings certainty. Two main themes: 1) Selective growth exposure in technology: post-correction crowding in tech has eased. High-growth subsectors where revenue-side expansion can offset denominator pressure—AI infrastructure-related links such as optical communications and PCB—retain strong near-term visibility; semiconductor and compute names require careful alignment of fundamentals and valuations, and tech growth may increasingly diverge. Innovation-stage drugmakers entering clinical-data validation merit bottom-up selection. 2) Cyclical recovery: an expanding set of sectors are rebounding from cycle troughs; factor in geopolitics and capacity-cycle positions and favour areas with improving earnings and tighter supply-demand, including power-grid equipment, petrochemicals/chemicals, construction machinery, and non-bank financials that benefit from stronger capital markets. Nonferrous metals, after heavy adjustment, also deserve attention. Pure domestic-demand sectors show slower recovery and require further observation.