CITIC Securities: Price increase as a spear, increase the undervalued exposure.

The research report from CITIC Securities indicates that from the perspective of rationalizing profit margins, China still has a large space for revaluation of resources and traditional manufacturing industries with competitive advantages. In many industries and at the index level, not only static valuation but also profit margins are constraints on the upside space. In the "Fifteen Five" period, the policy combination design to promote enterprises to improve quality and efficiency is the main theme. In terms of allocation, price increases are the spear, while increasing exposure to undervalued assets. From the demand side, it is recommended to focus on the electronic and mechanical chains with a larger AI exposure. From the supply side, it is recommended to invest in the chemical industry, non-ferrous metals, and the petroleum and petrochemical industries, which are currently experiencing supply disruptions.