CICC: September configuration focuses on overequipped communication equipment, machinery, and chemicals from the bottom up
The Zhitong Finance App learned that in September, CICC released a research report saying that looking forward to September, external uncertainty will rise, investors should pay more attention to exploring structural opportunities from the bottom up: 1) Technological growth is internal fragmentation, AI infrastructure (optical communication, PCB, etc.) is more deterministic, semiconductors need to focus on valuation matching, and innovative drugs enter the data verification period; 2) Combining the geography and production capacity cycle, focus on improving performance and improving supply and demand, such as construction machinery, power grid equipment, and petrochemicals; 3) The fundamental recovery in the pure domestic demand industry is still slow Observation is required. Configuration suggestions: overequipped communication equipment, machinery, basic chemicals, pharmaceuticals, banks; under-equipped industries: construction and engineering, textiles and clothing, education, light household, retail.
CICC's main views are as follows:
From late July to the end of August, A-shares showed overall restoration, and the technology style was relatively weak. As of September 1, the Shanghai Composite Index has risen 6%, and earnings have recovered since the beginning of the year. During this period, the market capitalization and dividend performance were excellent in terms of style, and the technology style was weak and clearly differentiated.
In September, the country faced a performance vacuum, and external uncertainty was rising. Recently, overseas geo-risk events were still frequent. Affected by supply disruptions, oil prices continued to fluctuate at a high level. Walsh delivered a hawkish speech at the Jackson Hole Global Central Bank Annual Meeting. The US PCE was 3.7% higher than the target level of the Federal Reserve. The probability of the Fed's interest rate hike during the year increased. Global investors paid close attention to the subsequent US, African, and CPI data and the September US interest rate meeting. Also, as the US midterm elections approach, an increase in related eventful factors may also affect market sentiment. Internally, the disclosure of A-share listed companies ended. The profit performance of companies in the second quarter was strong. It was the best performance period in the past 5 years. The industries with outstanding profit performance were concentrated in the fields of energy raw materials, AI, and exports. Profit from the components of the China Securities Artificial Intelligence Index increased 95% year-on-year in the second quarter, while semiconductors, components, and optical modules increased by 202%, 65%, and 140%, respectively. As of mid-2026, overseas business revenue from white goods, construction machinery, photovoltaic equipment, optics and optoelectronics, shipping ports, other electronics, other appliances, small household appliances, and games has exceeded domestic gross margins. Looking ahead to September, after experiencing an earlier period of market recovery and facing an uncertain and elevated external environment, investors may be focusing more on bottom-up industry and individual stock exploration at the current point. Judging from the recent boom performance of major industries:
1) Energy and basic materials: Oil prices fluctuate at high levels, and the Federal Reserve's monetary policy is facing uncertainty. Crude oil (down 1%) and the chemical price index (up 3%) fluctuated at a high level. Negotiations between the US and Iran were repeated, leading to uncertainty about actual traffic flow and expectations in the Strait of Hormuz. Combined with geographical conflicts in local regions such as the Red Sea and the Black Sea, disrupted supply and consumption of crude oil inventories. Crude oil prices rose for a while in August, showing an overall state of shock. The CICC commodities team believes that if subsequent trade in the Straits continues to be blocked, onshore crude oil inventories may still face pressure to eliminate in September. On the non-ferrous side, prices of non-ferrous metals such as gold (up 10%), copper (+3%), aluminum (+1%), and zinc (+7%) rebounded in August, and the Fed's monetary policy attitude was vague. The market was concerned about the US fiscal deficit and interest issues. 10-year and 30-year US Treasury yields were all high. On August 19, the US Treasury announced an expansion of the scale of long-term treasury bond repurchases and provision of liquidity support [3]. On the coal side, the prices of thermal coal (up 8%), coking coal (+46%), and coke (+27%) rebounded significantly. Domestic coal supply contracted due to regional events and stricter safety inspections, and coal production declined markedly. Raw coal production fell 10% year on year in July. In the short term, supply recovery and elasticity were limited, and the peak of summer coal demand gradually transitioned. We believe demand is expected to grow moderately. The price performance of domestic real estate chain-related commodities such as rebar (up 4%), iron ore (+2%), the Nanhua Glass Index (down 1%), and the cement price index (-0%) is still lackluster.
2) Industrial products: Domestic real estate investment is sluggish, and there is a lack of growth in upstream demand. Infrastructure mainly plays a supporting function. The success of the traditional “Golden Nine Silver Ten” peak construction season remains to be seen. The AI infrastructure capital expenditure industry chain and manufacturing demand for new energy sources have shown greater resilience. According to the mechanical team, the booming industry segments are mainly concentrated in fields such as robotics, the shipbuilding industry chain, and AIDC equipment. Domestic and international sales of construction machinery remained high. Domestic sales of excavators increased 19% year on year and export sales increased 32% year on year in July, or were affected by the phased sales volume approaching the middle of the year. The latest monthly sales growth rate slowed slightly. Looking forward to the future, demand for overseas construction terminals and mining is expected to continue to strengthen. In terms of power equipment, the capacity of new power generation equipment decreased by 46% in the first half of the year due to rapid installation before May 31, 2025. The decline in the capacity of new wind power and solar power generation equipment continued to narrow in the past 2 months, narrowing further to -12% and -61% respectively in July. Demand for lithium battery energy storage is strong, and it remains to be seen that the price increase in upstream raw materials will have a squeezing effect on the midstream industry. In terms of automobiles, domestic sales of fuel vehicles and new energy vehicles fell 37% and 4% year on year respectively in July, and the decline in demand has already been transmitted to the parts sector.
3) Consumer goods: The endogenous motivation for consumption needs to be improved. As one side of the “K-type differentiation,” overall demand needs to be boosted. The positive signals released by the current steady growth policy are mainly concentrated on the investment side, and the effects transmitted to the consumer side remain to be seen. The sales situation of some products we have tracked shows that sales of washing machines, refrigerators, and air conditioners fell 0%, 4%, and 10% year-on-year respectively in July, while food and beverage revenue and retail sales in the social zero segment increased by 1.4% and 0.5%, respectively. As of the end of August, Maotai's factory price and wholesale price had risen 8% and 1% month-on-month respectively, and the liquor industry was in the process of bottoming out. The average purchase price of pigs is 12 yuan/kg, which is basically the same from month to month, and supply in the pig market is at an all-time high.
4) Technology: Demand for AI data centers is still rigid. Anthropic's ARR growth rate in July fell short of expectations. Nvidia released results for the second quarter of fiscal year 2027 and provided guidance for the next fiscal year. The company's revenue and net profit performance exceeded expectations, confirming the rigidity of demand for AI data centers. The free cash flow of leading US cloud vendors is under pressure, and the longer-term investment in computing power remains to be seen. China's AI data center construction is also undergoing rapid expansion, and some companies have recently announced further strengthening AI infrastructure construction. Although the focus of AI narratives is gradually shifting to the application side, and stock prices in related fields have responded positively, the actual profitability of application-side companies has yet to be verified. In terms of consumer terminals, domestic sales of mobile phones, laptops, and computer hardware/monitor/computer peripherals rose 2%, 12%, and 15% year-on-year respectively in July. Demand for semiconductor sales was strong. In June, global and Chinese semiconductor sales increased 124% and 113%, respectively.
5) Finance: Stock market trading activity declined in the short term, and the July stock market performance may also affect the non-banking sector's performance in the third quarter. As of July, the insurance industry's premium income increased 2% year over year, and total assets increased 11% year over year. The average daily turnover of all A-shares in August was 1.3 trillion yuan, down 1.4 trillion yuan from the previous month. As of the end of the month, the balance of the two loans was 2.6 trillion yuan, up 0.06 trillion yuan from month to month. The popularity of transactions and exchanges declined, reflecting a rise in investors' wait-and-see attitude towards the performance of the stock market.
6) Real estate: Implementation of basic system reforms for a new model of real estate development. On July 30, the sales area of commercial housing in large and medium-sized cities was 5.65 million square meters, down 12% year on year and 14% month on month. In terms of housing prices, the housing sales price index for 70 large and medium-sized cities continued its downward trend in the newly built commercial housing and second-hand housing segments in July, falling 3.4% and 5.4% year-on-year, respectively. The July Politburo meeting proposed “stabilizing the real estate market.” On August 28, the Ministry of Housing, Urban-Rural Development, the Ministry of Natural Resources, and the General Administration of Financial Supervision and Administration jointly issued the “Notice on Improving the Commercial Housing Sales System”, the People's Bank of China and the State Financial Supervision and Administration jointly issued “Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Construction of a New Model of Real Estate Development”, and the Securities Regulatory Commission issued “Opinions on Capital Market Support to Support the Construction of a New Model of Real Estate Development”. A series of policy documents cover commercial housing sales systems, real estate credit management, capital market financing support, etc., to reform basic systems such as commercial housing development, financing and sales A new model for real estate development.
In terms of configuration, seize structural opportunities under economic clues. 1) After technology grows, the market may show a trend of differentiation, and careful selection is needed: AI infrastructure-related links, such as optical communication, PCB, etc., are still highly uncertain this year, and are expected to rebound after a sharp decline. More companies in the fields of semiconductors and computing power still need to pay attention to the degree of matching between fundamentals and valuations; more innovative drug companies have entered the clinical data verification stage, which is worth paying attention from the bottom up. 2) Comprehensively consider the geographical situation and production capacity cycle position, and focus on areas where performance is improving and the supply and demand pattern is improving: such as construction machinery, power grid equipment, petrochemicals, etc. The fundamental recovery in the pure domestic demand industry is still progressing relatively slowly and requires further observation.
Overequipped industries in September: communication equipment, machinery, basic chemicals, pharmaceuticals, banks.
Low-grade industries in September: construction and engineering, textiles and clothing, education, light and household goods, retail.