A-share market review | Four major favorable factors resonate, technology stocks support the rebound! A-share style switches again, how to layout?

On March 25th, A-shares continued to rebound, with the Shanghai Composite rising more than 1% back above 3900 points, and the ChiNext Index rising more than 2%. By the close, the Shanghai Composite Index rose 1.3%, the Shenzhen Component Index rose 1.95%, and the ChiNext Index rose 2.01%. The total turnover of the Shanghai and Shenzhen markets was 2.18 trillion yuan, with an increase of 970 billion yuan from the previous trading day. On the market, the "technology strong, resources weak" trend is evident. According to publicly available market data, four major favorable factors are resonating, with funds flowing significantly from traditional energy sectors back to the AI computing power industry chain. Firstly, geopolitical risk premiums have dropped, and risk preferences have recovered. Overnight news shows signals of negotiation between the US and Iran, indicating a easing of tensions in the Middle East. International oil prices have fallen, leading to profit-taking in safe-haven sectors such as oil and gold, and an increase in investment in more resilient technology growth stocks. Secondly, Token data explosion drives demand expectations. The National Bureau of Statistics revealed that China's daily Token call volume has exceeded 14 trillion, a growth of over a thousand times in two years. This data confirms a surge in demand for AI inference, directly igniting the computing power leasing, optical communication, and other infrastructure sectors. Thirdly, technological breakthroughs and policy catalysts. China's Information Technology Group has achieved a breakthrough in ultra-high-capacity optical transmission technology; Shenzhen has released an AI server industry chain action plan to promote the upgrade of optical modules to 1.6T/3.2T. The proposal of the policy "computing power collaboration" binds computing power with green electricity, enhancing the certainty of technological infrastructure construction. Fourthly, performance verification and price hike expectations. Leading storage chip company Biwin Storage Technology signed a large contract exceeding billions; institutions predict that storage chip prices in the first half of the year may rise by a three-digit percentage. Lumentum, a leader in optical modules, revealed that its production capacity is all sold out, providing micro-verification of the industry chain's prosperity. A-share style is shifting again, which sectors are favored by institutions? Guosen believes that in the short term, market styles may rebalance, with some undervalued "old assets" potentially gaining temporary advantages. Looking at the medium-term direction, sectors representing economic transformation and security direction, such as artificial intelligence (AI) and advanced manufacturing, remain core investment directions. These sectors have real industry policies and fundamental support and are more likely to lead the market into a new trend after adjustments. In other sectors, the power sector performed strongly throughout the day, with green energy leading the way. Over ten stocks, including Zhongmin Energy, Guangdong Electric Power Development, and Huadian Liaoning Energy Development, hit the daily limit. The tourism and hotel sector fluctuated upward, with Guilin Tourism Corporation hitting the limit; the military industry sector rose in the afternoon, with Hunan Tyen Machinery hitting the limit; the lithium battery sector fluctuated upwards, with Shandong Sacred Sun Power Sources and Veken Technology Ltd. hitting the limit. The oil and gas sector fluctuated weaker, with KLGF, Tong Petrotech Corp. falling by over 7%, and Sino Prima Gas Technology, Geo-Jade Petroleum Corporation falling by over 5%; the photovoltaic equipment concept fluctuated downward, with Suzhou YourBest New-type Materials falling by over 7%. Looking ahead, on March 25th, Kelvin Chu, Chief Investment Officer of HSBC Private Banking and Wealth Management China, released the HSBC second-quarter global investment outlook report. The report shows that in the second quarter, with robust growth momentum, strong domestic demand, technology innovation policies, and valuation advantages, Asian markets have become the preferred target for investors to diversify. Chu expressed optimism on Chinese stocks, focusing on innovative leading enterprises and high-quality high-dividend stocks through a "barbell strategy." On the one hand, this is to seize the opportunities of China's structural growth, and on the other hand, it aims to provide stable dividend income support for investment portfolios. Hot sectors 1. Token concept fermentation, computing power stocks surge With the fermentation of the Token concept, most computing power leasing concepts strengthened, with NET263 Ltd. and ZJBC Information Technology hitting the daily limit. Comment: According to official data, China's daily Token (Token) call volume surpassed 100 billion in early 2024, reaching 100 trillion by the end of 2025. In March of this year, it has exceeded 140 trillion, a growth of over a thousand times in two years. 2. Power sector outbreak The power sector surged, with the green energy concept leading the way, with over ten component stocks hitting the daily limit. Huadian Liaoning Energy Development has hit the limit for 8 consecutive days, Guangdong Shaoneng Group hit 5 limits in 6 days, and Guangdong Electric Power Development had 4 limits in 6 days. Comment: CITIC Securities pointed out that in the government work report, "green fuel" and "computing power collaboration" were mentioned, corresponding to China's strategy of energy independence and AI competition strategy. With the high-growth demand for green fuel preparation and data center green electricity supply, it is expected that by 2030, these two demands are expected to drive nearly 465GW of wind turbine demand, boosting the super prosperity of the wind power sector. 3. CPO concept active The CPO concept was active, with Dongguan Mentech Optical & Magnetic, Shanghai Allied Industrial Group, and Suzhou K-Hiragawa Electronic Technology hitting the daily limit. Comment: In terms of news, the US stocks' optical communication concept led the way, with Lumentum rising by 10% and reaching a historic high during the trading day, and Coherent rising by 6.78%. In addition, China set a new record in optical communication transmission, achieving real-time bidirectional transmission capacity of 2.5 petabits/second (Pb/s) on a 10.3 km 24-core single-mode optical fiber for the first time. 4. Semiconductor equipment concept strengthening The semiconductor chip industry chain was active, with Anhui Guofeng New Materials and Both Engineering Technology hitting the daily limit. Comment: In terms of news, SK Hynix announced plans to raise approximately $10 billion through listing in the US. SK Hynix will use potential earnings to build AI infrastructure, such as constructing a semiconductor cluster in Yongin, South Korea, and expanding the production capacity of storage products. Institutional views Zhongjin: The current may be the medium-term relative low point for A-shares, the deep adjustment has brought good opportunities for layouts CICC stated that the current may be the medium-term relative low point for A-shares, and the deep adjustment has provided good opportunities for layouts. Although there is still a certain degree of uncertainty in the short-term trend, after the adjustment, A-share market risks have been further released, and valuations are at relatively rational levels. In the medium term, the macro environment in which the market operates has not fundamentally changed, and the logic of "steady progress" in the A-share market remains valid, with the risk release and downtrend adjustment bringing good opportunities for allocation. Guosen: Market styles may rebalance amid short-term fluctuations Guosen believes that market styles may rebalance amid short-term fluctuations, with some undervalued "old assets" potentially gaining temporary advantages. Looking at the medium-term direction, sectors representing economic transformation and security direction, such as artificial intelligence (AI) and advanced manufacturing, remain core investment directions. These sectors have real industry policies and fundamental support and are more likely to lead the market into a new trend after adjustments. Guotai Haitong: From stagnation risk aversion to Taco 2.0 Affected by mid-term elections, the impact of market risks and inflation risks on Trump will significantly increase, prompting the US to eventually compromise or withdraw troops, known as Taco 2.0. Most Asian economies are petroleum-importing countries, similar to the US stock market. If there is a turning point in the Iran conflict, emerging market stocks are likely to become the major beneficiaries. This article is from "Tencent Stock Picks", GMTEight editor: Jiang Yuanhua.