A-share noon review | The three major indexes opened low and rose high, with the ChiNext Index rising more than 2% in the first half of the day! The "litmus test" effect of performance is highlighted.

On April 29, the three major indexes of A-shares opened lower in the morning and rose collectively, with "Ning Wang" and "Yi Zhongtian" institutions leading the way. This strong pull-up led to a sharp rise in the ChiNext Index, with thematic concepts showing overall strength. By the midday close, the Shanghai Composite Index was up 0.40%, the Shenzhen Component Index was up 1.58%, and the ChiNext Index was up 2.27%. The turnover in the Shanghai and Shenzhen markets in the first half of the day was 1.62 trillion yuan, a decrease of 40.6 billion yuan from the previous trading day. In terms of the market, as the disclosure period for the first quarter reports is coming to an end, although some stocks saw a significant drop in performance due to disappointing results, the overall market has entered a phase where "bad news is priced in". Funds are beginning to flow back into leading stocks with high earnings certainty, such as rare earth (China Northern Rare Earth with doubled profits) and food (Anjoy Foods Group). Several problematic stocks or stocks with disappointing performances, such as Shanghai Supezet Engineering Technology, Zhejiang Zhongjian Technology, Beijing Caishikou Department Store, and Dalian Bio-Chem, hit their daily limit downs. Specifically, the metal, rare earth, and gold resource concepts all showed strength, with several stocks like China Northern Rare Earth and Guangdong Xianglu Tungsten hitting their daily limit ups. The lithium resource, lithium iron phosphate, and electrolyte concepts all surged, with stocks like Shenzhen Dynanonic and Shandong Fengyuan Chemical hitting their daily limit ups. Pork stocks rebounded, with Shenzhen Kingsino Technology hitting the daily limit up. Sports and football revitalization concepts also rose, with stocks like Shuhua Sports and CoCreation Grass hitting their daily limit ups. The computing power hardware concepts, such as electronic cloth, PCB, and light modules, were all on the rise, with stocks like Grace Fabric Technology and Unicomp Technology Group hitting their daily limit ups. The gaming, cultural media, and AI application concepts all rebounded collectively, with stocks like Three's hitting the daily limit up. The consumer concepts, such as grain economy, retail, and tourism, showed strength, with stocks like Annil Co., Ltd hitting the daily limit up. The "six networks" concept, including power grid equipment, computing power, water conservancy construction, and underground pipeline networks, showed strength, with stocks like Qingdao Hanhe Cable and Jiangsu Lettall Electronic hitting their daily limit ups. The coal, electricity, steel, chemical industry, real estate, and humanoid Siasun Robot & Automation concepts all showed upward trends. In terms of declines, the military electronic concept continued to weaken, with Fujian Torch Electron Technology and China Zhenhua dropping by more than 6%. The CPU and analog chip concepts saw some pullback, with Hua Hong Semiconductor dropping by more than 5%. Only a few concepts like fusion energy, weight loss drugs, direct satellite connections for mobile phones, and photolithography machines showed weakness. Looking ahead, Zheshang stated that the market recently experienced "extreme styles," with the top 5% of stocks in terms of trading volume accounting for 46% of the daily turnover, prompting caution against market volatility caused by differentiation. In terms of opportunities, considering the volatility of the ChiNext Index triggering market consolidation, and the uncertain situation in the Middle East, as well as global capital markets not fully pricing in the rise in oil prices, it may be appropriate to allocate to dividend stocks (especially in the energy sector). Hot sectors: 1. Rare Earth Permanent Magnet Concept Shows Rapid Strength The rare earth permanent magnet concept showed rapid strength, with China Northern Rare Earth, China Rare Earth Resources and Technology, and Jiangsu Huahong Technology all hitting the daily limit up. 2. Active Performance of Pork Concept The pork concept was active, with Shenzhen Kingsino Technology hitting the daily limit up, and Jiangxi Zhengbang Technology reaching the daily limit up. 3. Repeated Activity in the Computing Power Rental Concept Activity in the computing power rental concept continued, with Xingyun Technology hitting the daily limit up, Jiangsu Lettall Electronic, Three's, Hunan Huasheng hitting consecutive limit ups, and Lotus Holdings and Tianyu Digital Technology Group hitting the daily limit up. Institutional Views: Zheshang: Market Shows Extreme Differentiation, Do Not Chase High in the Short Term, Wait in the Midterm Looking ahead, with the leading companies in the light module industry experiencing high and lows, this round of gains in the ChiNext Index is likely to pause in the short term, possibly leading to two-way fluctuations. However, there may still be opportunities for a push higher after a sufficient correction. On the other hand, if the ChiNext Index starts to oscillate, the entire market may enter a consolidation phase. If this round of non-ChiNext Index companies start to adjust, the Shanghai Composite Index is expected to gradually form a "right foot" relative to the low point on March 23, which will be a good opportunity for allocation. Additionally, considering the ChiNext Index's volatility leading to market consolidation, and the puzzling situation in the Middle East, and the global capital markets not adequately pricing in the rise in oil prices, it may be suitable to allocate to dividend stocks (especially in the energy sector). Furthermore, it may be advisable to consider companies like Hengke, securities, and innovative pharmaceutical companies that have experienced some pullback as potential choices to prevent downside risks and replenish positions. Sinolink: Massive AI Cluster Driving Acceleration of CPO, Bullish on Industry Chain Companies Sinolink's research report stated that the development of AI is driving the expansion of training cluster scale, with continuing growth in token consumption for inference-end calculations, driving the demand for computing power and networks. Sinolink believes that CPO can effectively help large-scale clusters reduce power consumption, increase interconnection density, and enhance transmission stability at high speeds. The current demand for CPO in the AI development sector is urgent, and the supply side of CPO is gradually maturing, with CPO expected to see accelerated penetration. Core supply chain companies of CPO are expected to continue to benefit from the trend of accelerated CPO penetration. Sinolink recommends focusing on core optical component companies, CPO manufacturing companies, and CPO solution companies. CICC: Prosperity Trading Expected to Return to Dominance High prosperity is the key to the growth style facing the uncertainty of the global macro environment. Many investors are puzzled by the ongoing uncertainty in the Middle East conflict, continued disruptions in the Strait of Hormuz keeping oil prices high, stagflation risks still higher than before the conflict, yet major global and A-share growth indices are leading the way to new highs in what seems like a challenging global macro environment. The determining factors for the growth trend often outweigh other factors such as macro, valuation, and funds. If the upward trend in prosperity is clear, the growth momentum on the numerator side is expected to counteract the rise in denominator side rates and risk premiums. The current rise in the growth style is largely driven by significant breakthroughs in AI since March. Although the Middle East situation has suppressed this prosperity trade, with the decrease in tail risk from the conflict, the prosperity trade suppressed by risk aversion is expected to return to dominance. This article was reprinted from "Tencent Stock Selection." Editor: Wang Qiujia.