A-share market closing review | A-shares staged a rebound in the afternoon, with the ChiNext Index rising by 0.5%, and the trading volume in both markets hitting a new low for the year.

On July 5th, A-shares collectively staged a deep V rebound in the afternoon. By the close, the Shanghai Composite Index fell by 0.26%, the Shenzhen Component Index rose by 0.25%, and the ChiNext board rose by 0.51%. Most stocks in the two markets rose more than they fell, with over 3900 stocks rising. The total turnover of the two markets for the whole day was 574.9 billion yuan, continuing to hit a new low for the year in turnover, with a decrease in turnover of 8.3 billion yuan compared to the previous day. As of today's close, the turnover of the two markets has been less than 600 billion yuan for three consecutive days, with domestic main funds net selling 9.308 billion yuan. On the market, pharmaceutical stocks strengthened collectively in the afternoon, led by innovative drugs. Zhejiang Xianju Pharmaceutical, Zhejiang Huahai Pharmaceutical, Luoxin Pharmaceuticals Group Stock, and Dezhan Healthcare all hit the limit up. AI application sector rebounded at one point, with KAISA JiaYun Technology Inc. and Beijing Quanshi World Online Network Information hitting the limit up. Financial and tax digitalization and software stocks were active, with Shanghai DragonNet Technology, Surfilter Network Technology, Nanjing Tdh Technology, and Beijing Philisense Technology all hitting the 20% limit up. Gold stocks fluctuated higher, with Shenzhen China Bicycle hitting the limit up, and Zhongjin Gold Corp., Ltd. hitting a new high for the year. On the downside, dividend stocks like banks collectively adjusted, with CITIC BANK falling by over 3%. Overall, more stocks rose than fell, with over 3900 stocks rising across the entire market. In terms of main funds, funds favored industries such as industrial metals, photovoltaic equipment, and passenger cars, while funds fled from industries like electricity, semiconductors, and consumer electronics. Institutional Views Looking ahead, institutions stated that it is worth paying attention to important meetings in mid-July and the disclosure of listed companies' performance, which are expected to provide new vitality to the current market. China Securities Co., Ltd.: The current pessimism is clearly dissipating, and market sentiment is expected to gradually recover China Securities Co., Ltd. analyzed that it will take time for market confidence to recover. In the future, it is worth paying attention to important meetings in mid-July and the disclosure of listed company performance, which are expected to provide new vitality to the current market. At the same time, current pessimism is clearly dissipating, and market sentiment is expected to gradually recover. Important ETFs have significantly increased their holdings, which will help provide some support to the market. However, the exchange rate of the RMB remains an important disruptive factor affecting fund inflows, and the continued low trading volume is a significant obstacle to market upside. In the future, it is important to closely monitor the dynamic changes of relevant factors. CICC: Future demand for advanced AI power supplies is expected to continue to increase CICC stated that server power supplies are the core of data center power system construction, and with the increase in AI computing power, the importance of advanced AI server power supplies continues to increase. Advanced GPUs also have higher requirements for AI server power supplies in terms of power and power density. For example, an H100 server rack with a power of about 10.2kw requires a 19.8kw power supply, while an NVL72 rack with a power of about 120kw needs a 198kw power supply. However, server power supplies need to achieve power expansion in a limited space. The power density of traditional server power supplies is mostly less than 50w/cubic inch, while the power density of AI server power supplies can reach 100 w/cubic inch. This also poses higher requirements for server power supply topology design and component application. CICC believes that the future demand for advanced AI power supplies is expected to continue to increase. CITIC SEC: Demand reshaping, optimistic about the upward shift of chromium salt prices CITIC SEC stated that due to the continuous high growth of downstream demand, metal chromium smelting has gradually become the main source of demand for chromium salt. Benefiting from the reconstruction of the global trade chain, China's metal chromium demand has grown in excess, bringing about excess demand for chromium salt domestically. As a heavily regulated industry in terms of environmental protection, after years of governance, the supply of chromium salt in the domestic and foreign markets is relatively tight and the structure is concentrated. Looking at a longer time horizon, the continuous high growth of metal chromium demand has strong certainty, and CITIC SEC is optimistic about the upward shift of chromium salt prices in the medium to long term under the background of demand reshaping. Hot Sectors 1. Traditional Chinese medicine and pharmaceutical stocks collectively rebound Innovative drugs, CRO, traditional Chinese medicine, and other pharmaceutical concepts surged collectively in the afternoon. Changjiang Pharmaceutical Group, Ji Yao Holding Group, and Zhejiang Sunflower Great Health all hit the 20% limit up, with Luoxin Pharmaceuticals Group Stock, Zhejiang Huahai Pharmaceutical, and Dezhan Healthcare among other stocks hitting the limit up. Comment: On the news front, the "Special Regulations on Traditional Chinese Medicine Standards" was approved for deliberation and will be implemented from January 1, 2025. In addition, there has been a wave of price increases in the traditional Chinese medicine market during the "off-season." Shen Yong, Director of the China Medical Health Development Promotion Expert Committee, stated that from several important documents released by the National Health Commission this year, it is still promoting the development of the traditional Chinese medicine industry, indicating a positive overall environment for the industry. 2. Financial and tax reform strengthens again Financial and tax reform and digital economy concepts were strong throughout the day, with Nanjing Tdh Technology, Shanghai DragonNet Technology, Beijing Philisense Technology, and Surfilter Network Technology, among other stocks, hitting the 20% limit up. Comment: On the news front, Hu Jinglin, Director of the State Administration of Taxation, stated in the "Learning"The Times article pointed out that efforts should be increased to promote legislation in the taxation field and speed up the progress of revising tax collection and management laws. Galaxy Securities research report stated that digitalization is an important lever for financial and taxation system reform, and creating a digital ecological system for finance and taxation is crucial.3. Precious metals concept rising The concept of gold and precious metals is rising, with Shenzhen China Bicycle hitting the limit up, while Zhongjin Gold Corp., Ltd. and Shandong Yulong Gold are approaching the limit up. Comment: Sinolink recently pointed out that in the absence of expectations of interest rate hikes this year, the probability of a deep correction in gold prices is small. This article is reproduced from Tencent's self-selected stocks. Editor: Zhang Jiwei.