A-share closing review: Shanghai Composite Index fell by 0.1%, market style divided, computing power hardware stocks surged.

Today, the market is volatile and differentiated, with the ChiNext Index rising by 1% to hit a near 11-year high, while the Shanghai Composite Index performs weaker. Companies in the optical communication and computing hardware sectors continue to surge, with the market trading at 2.4 trillion throughout the day, an increase of nearly a billion from the previous trading day, with half of the stocks in both cities rising and falling. It is worth noting that in the afternoon, individual stocks on the Beijing Stock Exchange saw some abnormal movements, with the BSE 50 Index rising by about 5%, and KAIHUA MATERIAL hitting its upper limit. From a news perspective, it is expected that the BSE 50 Index Fund will raise the subscription limit to 1.5 billion next week. Shenwan Hongyuan Group stated that there are a total of 38 BSE 50 Index Funds, all of which are over-the-counter subscription products, totaling 141.75 billion as of 3/31. With the current 500 million limit, there should be 190 billion, leaving a gap of 90 billion. The efficiency of funds entering and leaving will greatly increase, thus increasing the upward elasticity of the Beijing Stock Exchange. With the recent easing of tensions between the US and Iran, Trump's visit to China in May, the market is expected to see a partial rebound, benefiting the BSE 50 Index. In terms of market performance, there is a torn market style, with companies like Yuanjie Semiconductor Technology and Zhongji Innolight dominating the "new technology nobility" sector, while industries like alcohol and medicine have cooled off. Stocks in the computing hardware sector, such as optical modules, composite copper foils, PCBs, and fiber optic cables, have collectively surged, with multiple stocks like Cig Shanghai and Shenzhen Everbest Machinery Industry hitting their upper limits. Zhongji Innolight has reached a new historical high again, and Yuanjie Semiconductor Technology's stock price has surpassed Moutai to become the new "stock king" on the A-share market. Stocks in sectors like lithography machines, storage chips, and advanced packaging have also seen rises, with companies like Wuhan DR Laser Technology Corp. and TDG Holding hitting their upper limits. Concepts related to computing power rentals have become active again, with Jiangsu Lettall Electronic hitting its upper limit. The battery industry chain has strengthened again, with Shandong Sacred Sun Power Sources hitting its upper limit. The real estate sector briefly surged, with companies like Metro Land Corporation hitting their upper limits. Industries like non-ferrous metals, 6G, wind power, solar energy, and consumer electronics have also shown some performance. On the downside, pharmaceutical stocks continue to fall, leading sectors like pharmaceutical commercial and traditional Chinese medicine to decline. The oilfield service sector has also decreased again, while sectors like tourism, hotels, pork, and liquor have shown weak performance, with Kweichow Moutai falling by more than 4%. The chemical industry stocks have also fallen, with sectors like coal, agriculture, and automobiles showing green. Regarding focus stocks, there is a comparison between the "new king" and the "old god". Yuanjie Semiconductor Technology continues to strengthen during trading, breaking through 1410 yuan, surpassing Kweichow Moutai as the new "stock king" on the A-share market. Since September 24, 2024, Kweichow Moutai has accumulated a growth rate of nearly 20%, while Yuanjie Semiconductor Technology has accumulated a growth rate of nearly 1500%. The "stock god" Kweichow Moutai has fallen by more than 4%, previously releasing its annual report for 2025, showing a decline in annual revenue and net profit since its listing. Looking ahead, Huachuang Securities stated that this round is not a rebound but a counterattack, with the core being optimism about profit recovery under the positive Producer Price Index (PPI) trends. Opportunities include growth and cyclical styles in the mid-term after the market stabilizes, as the positive PPI trend may drive higher profit margins in cyclical sectors. In terms of individual stocks, there were a total of 76 stocks hitting their upper limits in both cities, with 7 stocks hitting their lower limits. A total of 2396 stocks rose, while 2986 stocks fell, and 124 stocks remained unchanged. At the close, the Shanghai Composite Index fell by 0.10% to 4051.43 points, with a turnover of 1.0135 trillion yuan; the Shenzhen Component Index rose by 0.60% to 14885.42 points, with a turnover of 1.4121 trillion yuan. The ChiNext Index rose by 1.43% to 3678.29 points. Capital Movement: Today, the main capital focuses on the components, communication equipment, and minor metals sectors, with the top inflow stocks being Victory Giant Technology, Yunnan Lincang Xinyuan Germanium Industry, and Accelink Technologies. News Review: 1. Changxin Storage and Changjiang Storage have prepaid production for scheduling. It was reported from the industry chain that since the fourth quarter of last year, Changxin Storage and Changjiang Storage have shown a phenomenon of "rushing for goods," which is still ongoing. Specifically, downstream customers need to pay first to channel distributors, and once the funds are received, the distributors will enter the production scheduling system queue and notify customers for pickup when the goods are available. Industry sources state that the above changes are in sync with the current upward momentum in memory chip prices. 2. Shenzhou 23 launch, reusable rocket flight verification, and China's major space missions announced this year. At the 2026 "China Space Day" press conference held by the National Space Administration today, relevant officials from the National Space Administration reviewed the major progress in aerospace in 2025 and announced key tasks for 2026. In 2026, China's space missions continue to be intensive: the Tianwen 2 probe will approach its target asteroid and conduct close-range exploration; the manned Changzheng spacecraft will carry out missions such as Shenzhou 23; multiple types of reusable rockets will carry out flight verifications; commercial spaceflight will focus on high-level security and high-quality development. 3. Pan Gongsheng: The People's Bank of China will implement moderately loose monetary policy. On April 16, 2026, the G20 held its first G20 finance ministers and central bank governors meeting of the year in Washington, USA. Pan Gongsheng, Governor of the People's Bank of China, attended the meeting and spoke, with Pan Changneng, Deputy Governor of the People's Bank of China, participating. Pan Gongsheng stated that China's economy is stable and improving, with optimized structures and new achievements in high-quality development. In the "Fifteenth Five-Year Plan" period, China will adhere to domestic demand, implement policies to boost consumption, vigorously develop the service industry, closely combine investment in things and investment in people, promote high-level opening-up, and advance high-quality development. The People's Bank of China will implement a moderately loose monetary policy to assist China's modernization process with high-quality financial services, contributing China's strength to global economic growth. 4. National Development and Reform Commission: Focus on expanding domestic effective demand, will formulate a strategic implementation plan to expand domestic demand from 2026 to 2030. On April 17, the Information Office of the State Council held a series of themed press conferences on "Starting the 'Fifteenth Five-Year Plan,'" to introduce relevant information on promoting high-quality economic and social development during the "Fifteenth Five-Year Plan" period. Wang Changlin, Deputy Director of the National Development and Reform Commission, stated that since the beginning of this year, there have been positive changes in economic operations, with clear improvements on both supply and demand sides. It has played a more stable role in the global economy, exceeding the expectations of many domestic and foreign institutions and experts. In the next steps, a macro-policy combination will be played, with a reserve of comprehensive policy measures to be issued promptly according to the situation. Efforts will be focused on expanding domestic effective demand, a strategic implementation plan to expand domestic demand from 2026 to 2030 will be formulated, and major engineering projects meeting the criteria will be started as soon as possible. Market Prediction: 1. Huachuang Securities: This round is a counterattack, not a rebound. Yao Pei, Chief Strategy Analyst at Huachuang Securities, stated that this round is a counterattack, not a rebound, with the core being optimistic about profit recovery under the positive Producer Price Index (PPI) trends. Based on the optimistic changes in PPI, the estimated year-on-year growth of A-share non-financial net profit is raised from 11% under neutral assumption to 17% under optimistic assumption. The main reason is that cyclical industries like resources and manufacturing, which account for nearly half of the market, are more sensitive to changes in PPI and are expected to contribute more to earnings elasticity during the PPI recovery process. 2. UBS Securities: A-share corporate profits are entering an uptrend cycle, with high earnings realization in the technology sector. UBS Securities stated that the factors driving the rise in the stock market are gradually becoming clear: first is profit recovery, with A-share corporate profits entering an uptrend cycle, and high earnings realization in the technology sector; second is industrial upgrading, with increased competitiveness in areas such as new energy, artificial intelligence, and semiconductors leading to a shift towards higher value-added exports in China; third is valuation advantage, as the equity risk premium in the A-share market is still far higher than the global market, highlighting the cost-effectiveness of A-share valuations. Due to the short-term uncertainty caused by geopolitical risks in the market, investors should relatively balance growth and value, as well as large-cap and small-cap stocks. After the market stabilizes, there is a positive outlook for growth and cyclical styles in the mid-term, as the "slow bull" market favors growth styles, and the narrowing or positive return of the PPI, combined with the increase in industrial enterprise profitability, is expected to drive the outperformance of cyclical styles. 3. CITIC SEC: Token call surge leads to computing power shortage, domestic computing power accelerates in inference endbreakthrough. According to CITIC SEC's research report, the explosion of applications such as Agent & multimodal drives a surge in Token call volume, leading to a shortage of domestic computing power, while the adaptation of large models to local inference ends brings acceleration opportunities for domestic computing power vendors. It is expected that the shipment volume of domestic computing power chips in 2026 will at least double, providing strong momentum for computing design companies, advanced processes, advanced packaging, advanced storage, and related industrial chains.