According to the CITIC Securities Research Report, although factors such as AI return on investment disputes, high interest rates and financing environments, and transaction congestion continue to suppress technology stock valuations, current GEM valuations have all returned to the low levels of the Federal Reserve interest rate hike cycle in 2017-2018 and 2023-2024, and Science Innovation 50 is also at a low level since the 924 market. Considering strong reality factors such as tight supply and demand for computing power and high EPS growth in technology stocks, once events such as the 2027 interest rate hike expectations are reversed, financing costs decline, model capability breakthroughs, and new applications drive the next round of ARR, the A-share technology sector will have tremendous resilience to repair. In terms of pace, we believe that 27Q1 will become an important observation window. On the one hand, the next generation model based on Rubin's training is expected to improve, and the national model will also enter a large-scale iteration window around the Spring Festival, and domestic HBM is expected to enter the mass production climbing phase. On the other hand, the outlook for computing power demand in 2028 is expected to be more clear, and early factors such as high interest rates on US bonds, FCC candidates, and geographical disturbances are also expected to become clear in Q1. Structurally, we believe that the certainty of AI applications is improving. Applications such as AI film and television, AI4S, and enterprise AI are planning a new direction. Physical AI is entering a new year. As foreign production computing power enters the harvest period, the expansion of domestic storage production is driving the boom in equipment, and we are focusing on alpha opportunities such as technological upgrades and high performance certainty.

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