A shares midday review | The Shanghai Composite Index traded flat in the morning, with Shanghai state-owned enterprise reform concept and AI application direction leading the gains.

On November 13, the three major A-share indexes collectively opened lower, followed by a weak trend. By the close, the Shanghai Composite Index fell by 0.00%, the Shenzhen Component Index fell by 0.65%, and the Chinext Index fell by 0.61%. In terms of market performance, Shanghai state-owned asset sectors rose against the trend, AI applications showed collective strength, the solid-state battery sector was active, and sectors such as companies starting with "Zhong" and e-commerce led the gains. On the downside, the tourism and hotel sector fluctuated lower, while the pharmaceutical, semiconductor, consumer electronics, and industrial automation sectors had larger declines. In terms of main funds, funds favored aerospace equipment, minor metals, and advertising marketing industries, while funds flowed out of the semiconductor, IT services, optical electronics, and securities industries. Institutional Views Looking ahead, Huatai believes that exchange rate fluctuations may cause short-term disturbances in the A-share market, but will not change the rhythm of the A-share market. The market may consolidate in a volatile manner in the short term. CITIC Securities: The market is on track for a year-end rally and may receive 500 billion yuan in incremental funds next year. CITIC Securities Chief Strategist Qin Peijing pointed out that the A-share market will experience a year-end rally in 2025, with a new cycle of profit growth expected in the second half of 2025. Optimistic about the implementation of two financial instruments by 2025, which could bring in at least 400-500 billion yuan in incremental funds next year. It is expected that under the special refinancing tool, the A-share market's buyback scale in 2025 may rise to nearly 200 billion yuan, providing liquidity. EB Securities: The current upward trend in the indexes remains unchanged. EB Securities stated that the market fell after reaching highs on Tuesday, with all indexes closing lower. Profit-taking by some funds after a continuous rise was a major reason for the market's adjustment. Additionally, the strong US dollar index reaching a four-month high and the drop in the Chinese yuan exchange rate, as well as the decline in Hong Kong stocks, were also reasons for the market's decline. Looking ahead, profit-taking after a continuous rise is normal, and the current upward trend in the indexes remains unchanged. With continuous economic improvement, favorable policies, and abundant liquidity, the market is expected to continue its upward trend in a volatile manner. Huatai: The market may consolidate in a volatile manner. Huatai believes that in recent days, the US dollar index has continued to rise and the short-term trend of the Chinese yuan exchange rate is under pressure. This may cause short-term disturbances in the A-share market, but will not change the market's rhythm. Trading volume remains above 2 trillion yuan, indicating active fund participation. This week, the market needs time to digest the results and impact of several uncertainties from last week as the Shanghai Composite Index approaches the high point of October 8, facing increased resistance near the dense trading zone. Crossing it will not be easy, and in the short term, consolidation in a volatile manner may take place. Popular Sectors 1. Shanghai state-owned asset sectors rise. Shanghai state-owned asset sectors showed strength, with Shanghai Material Trading, Y.U.D. Yangtze River Investment Industry, DLG Exhibitions & Events Corporation, and Shanghai Research Institute of Building Sciences Group hitting the limit up. Shanghai Join Buy, Arcplus Group Plc, Shanghai Xinhua Media, and others rose significantly. In terms of news, the Shanghai municipal government's executive meeting approved the "Action Plan to Support Listed Companies' Mergers and Acquisitions (2025-2027) in Shanghai," which supports listed company mergers and acquisitions. Shenwan Hongyuan Group's research report emphasizes the value of central enterprises and potential price increases for local state-owned enterprises. 2. AI application sectors show strength. AI application sectors like cultural media, short films, and Sora showed strength, with Beijing Haitian Ruisheng Science Technology Ltd., Easy Click Worldwide Network Technology, and BlueFocus Intelligent Communications Group rising by more than 10%. DHC Software, Guangdong Aofei Data Technology, Simei Media, Guangdong Insight Brand Marketing Group, Qingyun Technology, and Zhejiang Huace Film & TV followed the trend. In terms of analysis, Open Source Securities points out that the continuous improvement in multimodal capabilities such as large model inference, search, and video generation at home and abroad may continue to help increase AI application user numbers and open up commercial opportunities. Recommendations include focusing on large models/corpora/agents, AI + film and television, AI + music, AI + e-commerce/marketing, and AI + education publishing. 3. Active solid-state battery sector. The solid-state battery concept was active, with Grinm Advanced Materials hitting five consecutive limits, Jiangmen Kanhoo Industry, Lucky Film hitting the limit up, and LINGOOD rising by over 20%. HySum Flexibles Global, Inc., Shenzhen Senior Technology Material, Jiangsu Cnano Technology Co., Ltd., and others also showed gains.V&T Technologies and others are following the upward trend.Review: On the news front, several listed companies have made new progress in the field of solid-state batteries. Guangzhou Automobile Group stated that it has initially completed the full process manufacturing technology of solid-state batteries. Chongqing Changan Automobile expects to achieve full solid-state battery vehicle validation in 2027. Huaxi believes that in the recent period, the performance improvement and mass production progress of (semi) solid-state batteries by many companies have continued to advance, which is expected to accelerate the industrialization process of (semi) solid-state batteries. This article is reprinted from "Tencent Optional Stocks"; GMTEight editor: Wang Qiujia.