A-share market closing review | Shanghai Composite Index rose and then fell by 0.17%, stocks at previous highs continued to decline

On September 12, the market rebounded and fell throughout the day, with all three major indexes closing down. As of the close, the Shanghai Composite Index fell by 0.17%, the Shenzhen Component Index fell by 0.63%, and the ChiNext Index fell by 0.42%. On the stock market, Huawei concept stocks surged again, with the HarmonyOS direction leading the gains. Many stocks such as Montnets Cloud Technology Group, Shijiazhuang ChangShan BeiMing Technology, and Anhui Tatfook Technology hit the daily limit or rose by more than 10%. Stocks in the software sector, such as Nanjing Tdh Technology and Linewell Software, also hit the daily limit. The Hainan Free Trade Zone sector remained strong throughout the day, with stocks like Honz Pharmaceutical, Hainan Ruize New Building Material, and Hainan Haiyao hitting the limit. State-owned enterprise reform concept stocks were relatively active, with companies like Jianshe Industry Group and Wuhan East Lake High Technology Group hitting the limit. The photovoltaic sector also surged at one point, with stocks like Jiangxi Haiyuan Composites Technology and Suzhou Good-ark Electronics hitting the limit. In terms of declines, stocks that were previously at high levels continued to decline, with companies like Dazhong Transportation (Group) Co., Ltd. and LBX Pharmacy Chain Joint Stock hitting the limit. Consumer stocks in general experienced a decline, with liquor stocks leading the way, as Kweichow Moutai fell by over 3% to a new low since November 2022. Consumer electronics concepts like AI phones and foldable screens continued to perform poorly, with companies like LianChuang Electronic Technology and Triumph Science & Technology falling by over 8%. The previously strong lithium battery and solid-state battery sectors also experienced a one-day rally. Overall, more stocks fell than rose, with over 3,100 stocks declining in the entire market. The trading volume of the Shanghai and Shenzhen markets today was 515.6 billion, an increase of 16 billion from the previous trading day. In terms of main funds, funds favored industries like white goods and software development, while fleeing from industries like semiconductors, energy metals, and liquor. Institutional Views Looking ahead, China Securities Co., Ltd. stated that investors can continue to focus on the direction of stable growth policy initiatives, sectors with marginal improvement in performance at low levels, sectors where half-yearly reports show growth or may face a turning point in performance, sectors stimulated by policies and events, and sectors related to state-owned enterprise reform. China Securities Co., Ltd.: The market structure has changed, which is beneficial for the restoration of investor risk preferences There have been some changes in the market structure recently, with adjustments in high-dividend stocks and increased activity in low-level thematic concept stocks. This change is conducive to driving market sentiment and the restoration of investor risk preferences. In the future, investors can continue to focus on the direction of stable growth policy initiatives, sectors with marginal improvement in performance at low levels, sectors where half-yearly reports show growth or may face a turning point in performance, sectors stimulated by policies and events, and sectors related to state-owned enterprise reform. It is important to continue to grasp the rotation of hotspots and operational rhythms, and patiently wait for the market to bottom out. Sinolink: Huawei releases threefold Mate XT phone, continues to be bullish on foldable screen penetration Sinolink's research report pointed out that on September 10, Huawei released the threefold Mate XT phone. The three-fold hardware segment has seen significant growth, with hinges and flexible screens being the main cost increments for foldable screen phones. As foldable screen smartphone components transition from highly customized to standardized and modular supply modes, product manufacturing processes are streamlined, production efficiency and yield rates are improving, which is expected to bring economies of scale, effectively reduce the overall manufacturing costs of foldable screen phones, and accelerate industry penetration. It is recommended to focus on NBTM New Materials Group and others. Haitong: Chinese semiconductor market gradually recovering, industry has gradually destocked Haitong's research report pointed out that semiconductor materials are benefiting from the recovery of downstream demand and accelerated import substitution. Overall, both operating income and net profit have achieved positive growth. In the first half of 2024, the average year-on-year growth rate of operating income was 15.94%, and the average year-on-year growth rate of net profit attributable to the parent company was 15.65%. Globally, the semiconductor industry has seen a moderate recovery in the first half of 2024, with strong demand for data centers and artificial intelligence driving rapid growth in the market for AI servers and storage chips. Simultaneously, downstream terminals of semiconductors such as smartphones and computers are witnessing a warming consumer electronics demand, leading to the global integrated circuit industry returning to a growth cycle. In the domestic market in the first half of 2024, the Chinese semiconductor market is gradually recovering, and the industry has gradually destocked, with major wafer manufacturers steadily increasing their capacity utilization rates. Popular Sectors 1. Huawei's industrial chain erupts again Huawei concept stocks surged again, with the HarmonyOS direction leading the gains. Many stocks such as Montnets Cloud Technology Group, Shijiazhuang ChangShan BeiMing Technology, and Anhui Tatfook Technology hit the daily limit or rose by more than 10%. Review: Sinolink's research report pointed out that on September 10, Huawei released the threefold Mate XT phone. As foldable screen smartphone components transition from highly customized to standardized and modular supply modes, product manufacturing processes are streamlined, production efficiency and yield rates are improving, which is expected to bring economies of scale, effectively reduce the overall manufacturing costs of foldable screen phones, and accelerate industry penetration. It is recommended to focus on companies like NBTM New Materials Group. 2. Chinese semiconductor market gradually recovering, industry has gradually destocked Haitong's research report pointed out that semiconductor materials are benefiting from the recovery of downstream demand and accelerated import substitution. Overall, both operating income and net profit have achieved positive growth. In the first half of 2024, the average year-on-year growth rate of operating income was 15.94%, and the average year-on-year growth rate of net profit attributable to the parent company was 15.65%. Globally, the semiconductor industry has seen a moderate recovery in the first half of 2024, with strong demand for data centers and artificial intelligence driving rapid growth in the market for AI servers and storage chips. Simultaneously, downstream terminals of semiconductors such as smartphones and computers are witnessing a warming consumer electronics demand, leading to the global integrated circuit industry returning to a growth cycle; domestically, the Chinese semiconductor market is gradually recovering, and the industry has gradually destocked, with major wafer manufacturers steadily increasing their capacity utilization rates.Hainan free trade zone concept stocks collectively strengthened.The Hainan Free Trade Zone sector was strong all day, with multiple stocks such as Honz Pharmaceutical, Hainan Ruize New Building Material, and Hainan Haiyao hitting limit up. Comment: In recent news, the Ministry of Finance and four other departments announced a "zero tariff" policy for drugs and medical devices in the Hainan Free Trade Port. Before the island is completely sealed, medical institutions, medical colleges, and pharmaceutical research institutions registered and recognized in the Boao Lecheng International Medical Tourism Pilot Zone in Hainan, importing drugs and medical devices as specified in the policy will be exempt from import tariffs and value-added tax. The photovoltaic sector also surged at one point, with Jiangxi Haiyuan Composites Technology and Suzhou Good-ark Electronics hitting limit up. Comment: With news of Contemporary Amperex Technology "considering adjusting production capacity," US-listed photovoltaic and lithium mining concept stocks surged last night. The Pacific Securities believes that the next six months to a year is a window for the photovoltaic industry to confirm the bottom of the large cycle. In the short term, the continued decrease in enterprise operating rates and accelerated capacity clearing has stabilized quotes in the industry chain; in the long term, accelerated internationalization is the common choice of the industry chain. The state-owned enterprise reform concept stocks were relatively active, with Jianshe Industry Group and Wuhan East Lake High Technology Group hitting limit up. Comment: Tan Zuojun, member of the Party Committee and Deputy Director of the State-owned Assets Supervision and Administration Commission of the State Council, stated that in the next step, the commission will fully play a breakthrough and driving role in reforms, promote central enterprises to enhance core functions, improve core competitiveness, actively cultivate and develop new productive forces, and accelerate the construction of more world-class enterprises.