A shares midday review | A shares "core" blooms, index continues to hit new highs! Investors: The last time I saw this level, I was still using Nokia.

Under the geopolitical haze, oil prices have soared, gold has fallen, but Asian stock markets continue to strengthen under the boost of AI trends. On May 11, the A-share market opened strong, with the Shanghai Composite Index surpassing 4200 points to reach a new high in nearly 11 years; the ChiNext Index soared to break through 3900 points, reaching a new high since June 16, 2015. Some investors joked, "The last time I saw this level, I was still using a Nokia phone." The Sci-Tech Innovation 50 Index also reached a historical high. By midday closing, the Shanghai Composite Index rose by 0.94%, the Shenzhen Component Index rose by 2.13%, and the ChiNext Index rose by 3.03%. The total turnover of the Shanghai and Shenzhen stock markets in the first half of the day was 2.31 trillion yuan, an increase of 339.4 billion yuan from the previous trading day. In terms of the market, mining hardware stocks collectively strengthened, storage chip concepts surged, with multiple stocks such as Toyou Feiji Electronics, Puya Semiconductor (Shanghai) Co., Ltd., Hubei Sinophorus Electronic Materials hitting the limit up; optical fiber concepts were active, with Tongding Interconnection Information, 3onedata Co., Ltd. hitting the limit up; optical module concepts rose, with Jiangxi Redboard Technology, WG Tech(JiangXi)Group hitting the limit up; liquid-cooled server concepts rose, with Moon Environment Technology, Shenzhen Invt Electric hitting the limit up; PCB concepts rose, with Shandong Fiberglass Group Corp., Saurer Intelligent Technology hitting the limit up; chip concept stocks continued to rise, with advanced packaging concepts fluctuating and rising, JCET Group Co., Ltd., Shenzhen S-king Intelligent Equipment hitting the limit up; real estate stocks were active, with Hefei Urban Construction Development, Metro Land Corporation and many others hitting the limit up; commercial aerospace concepts continued to be strong, with Jonhon Optronic Technology, Hainan Drinda New Energy Technology hitting the limit up. In addition, rare earths, electricity, antivirus, and construction machinery sectors all performed well. On the downside, the port shipping sector fluctuated lower, with China Merchants Energy Shipping, GH SHIPPING falling by over 6%; the precious metals sector fell, with Chifeng Jilong Gold Mining falling by over 5%; the gaming sector initially declined, with Perfect World falling by over 4%; the medical sector had a poor performance, with Shanghai InnoStar Bio-tech falling by over 5%. In addition, banking, papermaking, and the automotive industry chain performed poorly. In terms of focus stocks, the new stock N Longyu touched the second circuit breaker, currently up nearly 700%. According to the prospectus as of May 6, 2026, the company has an annual production capacity of 75,000 tons of zirconium oxychloride, ranking first in the world in scale; the production capacity of special nylon polymerization is 15,000 tons per year, leading in variety richness in China. Looking ahead, foreign institutions continue to be optimistic about the Chinese capital market. Goldman Sachs believes that A-shares will create excess returns for investors in artificial intelligence, the "Fifteenth Five-Year Plan," and other directions. In the short term, stock prices may fluctuate, but in the long run, investing in research and development will definitely yield high-quality output. The tech narrative is reconstructing the foundation of the capital market, and in the next five years, we believe there will be more hard tech companies taking the spotlight on the A-share stage. Popular sectors 1. Storage chip concepts surge Mining hardware stocks collectively strengthened, with storage chip concepts surging, Toyou Feiji Electronics, Puya Semiconductor (Shanghai) Co., Ltd., Hubei Sinophorus Electronic Materials and other stocks hitting the limit up. Review: In the early trading on Monday, SK Hynix's stock price rose by more than 8%, and Samsung Electronics' stock price rose by over 5%, both hitting historical highs. According to media reports quoting insiders, global tech giants are competing to offer investments for SK Hynix, the Korean storage giant, to build new production facilities and purchase expensive production equipment in order to secure storage chip supplies ahead of others. This phenomenon in the global storage chip industry is unprecedented, highlighting the severity of the global chip shortage. 2. Advanced packaging concepts fluctuate and rise The advanced packaging concept fluctuated and rose during trading, with JCET Group Co., Ltd. hitting the limit up, reaching a historical high, with a total market value nearing 100 billion. Review: During the performance and cash dividend briefing for the 2025 and 2026 first quarter, JCET Group Co., Ltd. executives mentioned that the company had increased its fixed asset investment budget to 10 billion yuan for the year 2026, mainly for the construction of advanced packaging production lines and the expansion of mainstream packaging capacity. 3. Liquid-cooled server concepts continue to rise The liquid-cooled server concept continued to rise during trading, with Moon Environment Technology, Zhejiang Dayuan Pumps Industry, Shenzhen Invt Electric, Zhuhai Bojay Electronics, Jiangsu Seagull Cooling Tower hitting the limit up. Review: On the news front, the power consumption of AI chips, represented by Nvidia, is increasing at a double-digit generational rate. From B200's 1000W to the future Rubin series R300's 4000W+, the single cabinet power density has leaped to over 140kW, far exceeding the economic cooling limit of 15kW of air cooling systems. Liquid cooling has become the only choice to support high-density computing deployment. 4. Real estate stocks are active Real estate stocks were active, with Hefei Urban Construction Development, Metro Land Corporation and other stocks hitting the limit up. Review: A report from China International Capital Corporation stated that real estate is not an outdated asset. With an aging population and urbanization nearing completion, China's real estate cycle has entered the "second half," and popular opinions believe that real estate will become a low-return asset. However, cross-national data shows that over the past century, real estate has significantly outperformed bond assets in most economies, with returns adjusted for risk approaching those of stock assets. Institutional views China Galaxy: The market may face a pattern of consolidation and increased differentiation in the short term In the short term, the U.S.-Iran conflict continues to cause disturbances, but the market's sensitivity to external conflict events has weakened, with the impact converging marginally and attention shifting to external events such as Trump's visit to China and the change of leadership at the Fed. Structural highlights are prominent in the domestic fundamentals repair, providing performance support to the market's upward trend. As the Shanghai Composite Index approaches 4200 points, the market may face a pattern of consolidation and increased differentiation in the short term. The overall upward trend remains unchanged, with sector rotation and structural market conditions continuing to be the main characteristics of operation. We continue to emphasize focusing on leading opportunities and taking structural layout directions. CITIC SEC: Active reduction in volatility is a better choice under the background of continuous strengthening of the existing structural market trend Recently, the tech stock market momentum in China, the U.S., Japan, and South Korea has been continuously strengthening. However, no matter how strong an industry trend is, a steep slope in the short term can lead to severe volatility. The ChiNext Index's latest MSI reading (momentum strength index) is 64.4, still within a historically reasonable range overall; it is worth mentioning that before the pullback on May 8, the reading on May 7 was 71.9, very close to the critical value of 75 for the strong acceleration zone. Even though the AI-related industry trend is strong, abnormally strong momentum and steep upward slopes in the short term are likely to indicate increased volatility. In this context, for existing capital, actively reducing portfolio volatility may be a better choice. East Money Information Securities: AI industry trends are primary, and market sentiment and capital games are derivatives of trends In the three trading days after the May Day holiday, the communication and electronics sectors led the entire market, confirming that the diffusion of the AI boom has become the core clue for market choices after the "April Decision." The priority observation indicators for the mainstream are: U.S. AI capital expenditure > Chinese mining hardware for domestic substitution > Chinese AI application commercialization and realization of benefits. The reason is that the AI industry trend is primary, and market sentiment and capital games are derivatives of industry trends. When AI Capex is high, the sustainability of the main theme can be secured by funding, and other aspects such as domestic substitution and application catching up with the market constitute extensions and expansions of the main theme. The guidance for the 2026 Capex of the four major cloud factories in North America has been collectively adjusted upwards, and the expectations for high growth in 2027 have been realized, dispelling the market's concerns about "peak AI capital expenditure." Signals such as increased Token volumes, self-developed chips by large factories, continued commercialization, and year-over-year restoration of ROIC further enhance the sustainability of the prosperity. This article is taken from "Tencent Self-selected Stocks", GMTEight Editor: Wang Qiujia.