CITIC Securities: Investors need to gradually adapt to asset allocation in an environment where the renminbi continues to appreciate.

The research report from CITIC Securities stated that the factors driving the appreciation of the Renminbi are gradually increasing, and market attention is also starting to heat up. Investors should gradually adapt to asset allocation in an environment of continuous Renminbi appreciation. Looking at the seven rounds of Renminbi appreciation cycles in the past 20 years, exchange rate is not the decisive factor for industry allocation. However, certain industries may indeed perform better in the early stages of continuous appreciation expectations, and the market may replicate such muscle memory. Additionally, from the analysis of cost and income, about 19% of industries will see profit margin increase due to appreciation, and these industries will gradually be given more attention by investors. Furthermore, policy responses taken to suppress rapid one-sided appreciation trends are actually more important factors affecting industry allocation. In terms of industry allocation, in the background of continuous Renminbi appreciation, one can focus on three clues: short-term muscle memory driving, profit margin change driving, and policy change driving. In this issue, we have focused on detailing the potential beneficiary industries.