According to the CITIC Securities Research Report, the current round of A-share adjustments is more of a correction of congested trading than a Korean-style deleveraging impact. This is reflected in: 1) the overall leverage situation is relatively safe, with the number of stocks rising in July close to half of all A, clearly exceeding June; 2) compared to the typical deleveraging market in global history, the current decline in financing is not significant; 3) the ETF market shows continuous capital inflows, and the inflow of technology ETFs provides sufficient liquidity support. Of course, local liquidity pressure still exists, especially for some non-core AI stocks. The adjustment of these individual stocks affected position adjustments within the technology sector, causing the pricing of the core target to fail for a short time, but we believe this impact has basically been eliminated. The probability of a general recovery in August is still improving, but it is not simply a fall and a rebound. The negative narrative in the non-AI sector improved marginally, and the financial environment also supports proper restoration. In terms of allocation, it is recommended to add energy, non-ferrous, non-banking, and innovative drugs. The internal technology needs to focus more on holding positions through a rebound.

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