CITIC Securities: The spring market after the holiday is expected to continue. Price increases remain one of the core allocation clues for the first quarter.

CITIC Securities research reports believe that February of this year is an important watershed. The leap in AI coding capabilities has officially pushed the scale of effective code worldwide into an exponential growth phase. Under current physical AI technology conditions, the total value and total income of society’s tangible production are far behind the expansion rate of AI-generated code. The global economy is likely to first experience a process of code volume expansion, excess execution capacity, intensified competition, and declining returns on capital investment. Based on two dimensions—physical dependency and regulatory/emotional barriers—CITIC Securities classifies industries into four categories: affected (low physical dependency, low regulatory/emotional barriers), reshaped (low dependency, high barriers), fortress (high dependency, high barriers), and benefited (high physical dependency, low regulatory/emotional barriers). In the near future, the gap in benefits between beneficiaries of tangible scarcity and those harmed by code expansion may continue to widen, and this differentiation trend will persist. This is a new factor that must be considered when analyzing market conditions and sector allocation. From a short-term market perspective, the A-share industry landscape is primarily centered on manufacturing and finance. Under this round of AI impact, the influence on A-shares is relatively smaller compared to US and Hong Kong stocks. The pattern of capital inflows and investor optimism remains unchanged, and the spring market after the holiday is expected to continue. Price increases remain one of the key investment clues for the first quarter.