CITIC Construction Investment notes that the current macroeconomic environment is marked by robust export performance amid domestic demand headwinds. For August’s industry allocation, they advocate a barbell strategy combining “defensive core holdings, supply-constrained price increases, and a tech sector rebound.”

In July, the market saw a notable rotation away from overcrowded growth stocks toward undervalued value sectors. However, the tech sector’s pullback was primarily driven by profit-taking and deleveraging rather than a fundamental reversal in the AI industry’s growth trajectory.

In terms of allocation, priority should be given to industries like shipbuilding and non-ferrous metals, where improving outlooks, balanced supply-demand dynamics, and rising prices create favorable conditions. AI hardware exposure can be shifted from underweight to neutral, with a focus on high-conviction areas such as optical modules and AI servers. Additional positions may be added incrementally after mid-year earnings, cash flow, and stock prices stabilize.

Sectors such as coal, petroleum and petrochemicals, and food and beverages—which outperformed in July—should be approached cautiously at current valuations. Instead, investors should carefully select upstream resource plays and high-quality consumer leaders with sustainable competitive advantages.