CITIC Securities says post-2022 the A-share market has settled into persistent,
structural rapid sector rotation; extreme rotation episodes typically last about
1–2 months and reflect insufficient breadth of earnings upgrades and a shortage
of sustainable lead themes. Rising trade tensions and larger exchange-rate
translation swings are constraining offshore/export earnings narratives and
valuations, narrowing market breadth and reinforcing fast sector rotation.
Recent AI progress strengthens an existing rapid rise in compute demand but is
insufficient to change the long-term commercialization narrative; only further
technical shifts (e.g., RSI, anti-distillation) could materially expand
long-term valuation space. In high-rotation regimes, low-valuation strategies
generally outperform; PB-ROE strategies show a clear edge and see returns rise
with rotation speed, while momentum strategies are most impaired. Under rapid
rotation, upside tends to be valuation repair in names with earnings support.
Recommended mid-term allocation is a barbell of AI + energy/chemicals: expect AI
concentration in Q2 and a gradual warming in energy/chemicals thereafter.
