A-share market closing review | Stock index surged in the final hour! Shanghai Composite regained 3000 points, lithium mineral leading the charge.

A-share market surged in the afternoon, with the Shanghai Composite regaining the 3000-point mark and the ChiNext Index closing up 3%. Hot topics collectively experienced a resurgence, with semiconductor, lithium battery, and information technology innovation sectors leading the charge. In terms of market performance, lithium mining stocks surged in the afternoon, with leading companies Ganfeng Lithium Group and Tianqi Lithium Corporation both hitting the limit up. Information technology innovation concept stocks rebounded, with China Greatwall Technology Group hitting the limit up. Stocks related to Huawei phones continued to perform strongly, with stocks such as Jiangsu Kuangshun Photosensitivity New-Material Stock hitting the limit up. Chip stocks continued to rise, with C*Core Technology hitting a 20% limit up. Securities stocks also saw unusual movements, with Guangdong Golden Dragon Development Inc. hitting the limit up at one point. High-priced stocks regained popularity, led by China Fortune Land Development, with many stocks hitting the daily limit up. Stocks trading below net asset value performed comparatively weakly, with coal, mid-cap stocks, and banks leading the declines. Overall, the market saw a decrease in turnover of nearly 200 billion, with over 4500 stocks rising in both markets. Specifically, lithium mining stocks surged in the afternoon, with leading companies Ganfeng Lithium Group and Tianqi Lithium Corporation hitting the limit up. CITIC SEC believes that the drop in lithium prices in Q3 2024 has led to overseas lithium mines expanding production cuts, with some mining companies selling assets to raise funds. We believe that Australian lithium mines are already starting to lose cash, and there may be more lithium mine production cuts in the future. Therefore, we have revised down the excess supply of the lithium industry in 2026 to 25,000 tons. In the short term, the fundamentals of the lithium industry have improved, current lithium prices are oversold, and with the "rush" effect of lithium stocks, the lithium sector is expected to rebound. The concept of Huawei phones exploded, with stocks like Jiangsu Kuangshun Photosensitivity New-Material Stock hitting the limit up. On the news front, on November 18th, the Huawei Mate 70 series announced the start of product reservations at 12:08. Within the first 5 minutes of opening, over 270,000 people had already made reservations. By 8:15 in the morning, reservations had exceeded 2 million. China Securities Co., Ltd. pointed out that they are optimistic about the sales performance of the Huawei Mate 70 series after its launch and recommend continuous monitoring of the Huawei industry chain. Looking at individual stocks, 4516 stocks rose in both markets, with 777 falling and 74 remaining unchanged. There were a total of 103 limit up stocks and 37 limit down stocks. At the close, the Shanghai Composite rose by 0.67% to 3346.01 points, with a turnover of 651.6 billion yuan; the Shenzhen Component Index rose by 1.90% to 10743.84 points, with a turnover of 906.5 billion yuan. The ChiNext Index rose by 3.00% to 2256.61 points. Funding Trends Main funds notably invested in the communication equipment, automation equipment, and precious metals sectors, with top net inflow stocks including China Greatwall Technology Group, Hytera Communications Corporation, and Guangdong Topstar Technology. News Review 1. National Development and Reform Commission: Will study and propose future policies to further increase support for the "two new" sectors and expand support range Li Chao, spokesperson for the National Development and Reform Commission, stated at a press conference on the 19th that in the process of advancing the "two new" sectors, they will continue to strengthen the supervision of the full chain of funds, promote projects to form physical workloads quickly, optimize the consumer market environment, crack down on behaviors such as "raising prices before discounts" and "false discounts" according to the law, and continue to do well in recycling work, guiding the newly established China Resource Recycling Group to accelerate the deployment of national-functional resource recycling platforms and carry out special inspections on illegal dismantling of waste electrical and electronic equipment. As for the next steps of the "two new" policies, on one hand, they will carry out an evaluation of the effects of supporting the "two new" policies, summarizing good experiences and practices; on the other hand, they will study and propose future policies to further increase support for the "two new" sectors, which will be publicly released in due course after completing relevant procedures, continuing to promote the benefits of the "two new" policies for the masses, companies, and the economy. 2. Guangzhou: Will purchase existing commodity housing with an area of less than 90 square meters as affordable housing throughout the city Guangzhou Housing Group announced on November 18th that it will purchase existing commodity housing with an area of less than 90 square meters as affordable housing throughout the city. Interested developers can apply from November 18th to December 18th. This means that the measure of purchasing existing commodity housing as affordable housing in Guangzhou is officially expanding from previous areas such as Zengcheng to the entire city. The housing must meet the following conditions: clear assets and liabilities and legal relationships, possession of a completion joint acceptance opinion, an area of 90 square meters or less, clear property rights available for transfer, no restrictions such as seizure registration or objection registration, and written consent from relevant rights holders in cases of mortgage or other rights restrictions, and priority selection of entire unsold blocks or units that can be managed in a closed manner. 3. China Securities Regulatory Commission: Timely improve rules and regulations related to share reduction, quantitative trading, margin trading, etc., and related regulatory measures Wu Qing, Chairman of the China Securities Regulatory Commission, stated at the International Financial Leaders Investment Summit on November 19th that the commission will adhere to seeking benefits and avoiding harm, emphasize fair and standardized development, and timely improve rules and regulations related to share reduction, quantitative trading, margin trading, etc. Market Outlook 1. EB SECURITIES: Signs of Shanghai Composite stabilizing may lead to continued rotation of hot spots EB SECURITIES pointed out that the release of the "14 Measures for Market Value Management", which sets special requirements for the constituent stocks of major indices to establish a market value management system and improve valuation plans for long-term companies trading below net asset value, will stimulate some stocks trading below net asset value and blue-chip sectors on Monday.Rising against the market; under the seesaw effect, high-priced themes are falling in general. Looking ahead, although the market is falling in general, structurally, funds are shifting from high-priced thematic hot spots to undervalued blue-chip stocks that have been stagnant recently, and there are signs that the Shanghai Composite Index is stabilizing first; in terms of market style, hot spot rotation may continue.2. Huatai: Market may be volatile in the short term, New Year rally can still be expected Huatai pointed out that the market may be volatile in the short term, with the low point in early November still providing support. Investors are advised to wait for stabilization of the US dollar, US bonds, and exchange rates, as well as for the policy meetings in December. Investors should pay attention to buying on dips, and the New Year rally can still be expected this year. In terms of strategy, due to the significant fluctuations in the market caused by investor expectations, some sectors have become oversold due to market sentiment. If market expectations improve in the future, the oversold sectors may see a significant rebound. In the short term, attention should be paid to oversold sectors and policy-driven sectors. 3. China Securities Co.,Ltd. Chen Guo: Funds hesitating and doubting lead to slow bull market Chen Guo, Chief Strategy Officer of China Securities Co., Ltd., wrote in the morning, "In a market that has been persistently sluggish and where investors lack a sense of achievement, even if a major turning point is reached, it may be considered a luxury to talk about investors' firm mindset. Many funds are inclined to buy and sell quickly, causing fluctuations. It's just a matter of getting used to it, and things will eventually change. From the policy perspective to the fundamentals, progress and improvement are being made step by step. Funds are hesitant and doubtful, leading to a slow bull market."