A-share midday review: Shanghai Composite Index fell by 0.23%, while concept stocks of information technology and creativity strengthen collectively. Concept stocks related to shipbuilding continued to decline.

On September 20, the three major stock indexes opened with mixed gains and losses, followed by the weighting pressure on the CSI 50 and ChiNext 50, causing all three indexes to collectively decline. By the close of the market, the Shanghai Composite Index fell by 0.23%, the Shenzhen Component Index fell by 0.44%, and the ChiNext Index fell by 0.8%. In terms of stock performance, companies in the technology and Huawei concepts continued to be active, with CHINA BEST Internet Security rising for three consecutive days; real estate stocks rebounded, with Beijing Electronic Zone High-tech Group rising for four consecutive days; DRG concept stocks generally rose, with China Reform Health Management and Services Group rising by over 3%; state-owned enterprise reform concepts remained active, with Baoding Tianwei Baobian Electric rising for 9 consecutive days and Datang Telecom Technology rising for 4 consecutive days. In terms of decline, the photovoltaic equipment sector declined, with Tongwei Co.,Ltd falling by over 3%; the China Shipbuilding Industry concept continued to fall, with China Shipbuilding Industry and China CSSC falling by about 4%; and the consumer goods sector adjusted, with Xinjiang Western Animal Husbandry falling by over 2%. In terms of main fund flows, funds favored industries such as software development and consumer electronics, while exiting industries such as semiconductors, securities, and photovoltaic equipment. Institutional Views Looking ahead, China Securities Co., Ltd. stated in a research report that the core factors suppressing the A-share market are gradually easing, and with the further relaxation of overseas liquidity, the market may be at a turning point. Huatai: The Fed has started cutting interest rates Gold prices may still have room to rise Huatai stated that the Federal Reserve announced a 50bp rate cut in September. Powell's subsequent statements at the press conference leaned towards hawkish, emphasizing that the U.S. economy remains relatively healthy. Overall, the combination of a "50bp rate cut" and "hawkish stance" has a relatively limited impact on gold prices. In addition, since gold prices are currently relatively fully priced for U.S. rate cuts, it is expected that gold prices will likely continue to fluctuate at high levels in the short term. In the long term, the trajectory of the U.S. economy after the rate cut and the U.S. presidential election will be important factors driving further increases in gold prices, based on the background of U.S. "loose fiscal policy" and "high inflation". CITIC SEC: The probability of the RMB exchange rate trending above 7.0 this year is small CITIC SEC's research report stated that they believe the probability of the RMB exchange rate trending above 7.0 this year is small. Firstly, although the Federal Reserve made a significant rate cut this time, the subsequent path given is flexible and prudent. Secondly, there are still issues of insufficient effective demand in the domestic economy in the short term. Thirdly, they believe that the Chinese central bank hopes to maintain exchange rate stability, and rapid appreciation or depreciation may both pose risks. A review of the three previous cycles of RMB exchange rate appreciation revealed significant weakening of the U.S. dollar index and a clear improvement in the domestic economic fundamentals. Popular Sectors 1. Huawei concept stocks continue to be active Companies related to the technology and Huawei concepts continued to be active, with CHINA BEST Internet Security rising for three consecutive days, and other related companies following suit. Analysis: The ninth Huawei Global Connect Conference will be held from September 19 to September 21, 2024. The topics of this conference include the construction of the HarmonyOS ecosystem and native development. Analyst Guo Mingxu's report indicates that according to the latest supply chain survey, the estimated shipment volume of Huawei's triple-fold screen smartphone, the Mate XT, for 2024 has been raised from 500,000 units to 1 million units. 2. Real estate stocks rebound Real estate stocks rebounded, with Beijing Electronic Zone High-tech Group rising for four consecutive days and other related companies following suit. Analysis: The Beijing Municipal Committee of the Communist Party of China has issued implementation opinions for the comprehensive deepening of reforms and the promotion of China's modernization. It mentions the improvement of the system of renting and buying houses. It aims to accelerate the establishment of a new real estate development model that suits the characteristics of the capital, increase the construction and supply of affordable housing, and meet the rigid housing needs of salaried workers. 3. DRG concept stocks generally rise DRG concept stocks generally rose, with China Reform Health Management and ServIces Group rose by over 3%, with Inspur Software, Taiji Computer Corporation, Sichuan Jiuyuan Yinhai Software, Wonders Information, Neusoft Corporation, Beijing Thunisoft, and others also rising.Review: Pacific Securities stated that under the DRG payment scheme, drugs and consumables become costs, which will encourage medical institutions to actively control costs, improve bed turnover rates, and enhance the operational efficiency of hospitals. 4. Photovoltaic Equipment Sector Declines The photovoltaic equipment sector declined, with Tongwei Co., Ltd falling by over 3%, Jolywood, JA Solar Technology, Jiangsu Goodwe Power Supply Technology Co., Ltd., Hainan Drinda New Energy Technology, Flat Glass Group, and others falling by over 2%. Comment: Wang Yanqing, a futures analyst at China Securities Co., Ltd., stated that the volume of component bids in recent period is relatively low compared to the same period last year, and component prices continue to decline, with some low prices even below 0.7 yuan/W. Given the relatively chaotic prices in the component sector and continued weak demand, it is expected that the difficulty of short-term component price recovery is high. Moreover, overseas demand, especially from Europe, is also showing a weakening trend, indicating significant pressure in the component sector overall. This article is reprinted from "Tencent Stock Selection"; GMTEight Editor: Wang Qiujia.