A-share midday review | The Shanghai Composite Index fell by 0.39%, the semiconductor industry chain rose, and high-level stocks collectively plummeted.

After the opening, the Shanghai Composite Index fluctuated and adjusted, and the sci-tech innovation 50 index rose more than 2% at one point. By the close, the Shanghai Composite Index fell by 0.39%, the Shenzhen Component Index fell by 0.65%, and the ChiNext Index fell by 0.5%. In terms of the market, the semiconductor industry chain saw a surge in limit-up stocks, with national large funds holding shares, storage chips, and lithography machines soaring. Hangwujun rose over 5% to a new high; Siasun Robot&Automation continued to be strong, Suzhou Medical System Technology had 3 consecutive limit-up days, Zhejiang XCC Group had 2 consecutive limit-up days, and Jianshe Industry Group challenged the limit-up to reach a new high; the AI companion concept saw an initial rise, with Soho Holly Corporation having 2 consecutive limit-up days. On the downside, high-priced stocks collectively weakened in the morning, with Shanghai Hi-tech Control System and Jiangsu Seagull Cooling Tower both hitting limit-down, as well as Shenzhen Gongjin Electronics, Shenzhen Center Power Tech., Dianguang Explosion-proof Technology, Hangzhou Zhongheng Electric, and others experiencing significant declines. In terms of main capital flows, funds preferred industries such as semiconductors, industrial metals, and automotive components; funds flowed out of industries such as optical electronics and computer equipment. Institutional Views Looking ahead, China Securities Co., Ltd. stated that in the short term, the index is in a dilemma at this level, facing active actions from large funds below but lacking enough momentum from the upside, so the short-term trend is likely to remain volatile. China Securities Co., Ltd.: The short-term trend is likely to remain volatile China Securities Co., Ltd. stated that in the short term, the index is in a dilemma at this level, facing active actions from large funds below but lacking enough momentum from the upside, so the short-term trend is likely to remain volatile. The 3100-3200 point range is likely to form significant support, serving as a range for short-term dips intervention, and the turning point in the future may need to wait for the implementation of the central bank's reserve ratio cut and interest rate cut and the policy tone of the two sessions. In terms of market performance, sector rotation and hotspots are expected to remain high. CITIC SEC: Optimus's year of mass production Likely to inject strong confidence into the human-shaped Siasun Robot&Automation sector A CITIC SEC research report indicated that recent information suggests that Tesla's Optimus project is likely to have a major version update soon, and is expected to enter mass production in 2025, maintaining explosive growth at 10 times per year over the next two years. In addition, North America's artificial intelligence giants have also indicated putting Siasun Robot&Automation at the forefront of their next strategic center. The above information is likely to inject strong confidence into the human-shaped Siasun Robot&Automation sector, and also implies that investment nodes are becoming clearer, with a focus on the core links of the Tesla Siasun Robot&Automation industry chain, recommending a focus on: 1) assembly; 2) reducer; 3) screw; 4) dexterous hand. It is recommended to pay attention to other important players in the industry. Huatai: Range expansion of old-for-new policies, focus on strong vehicle cycle companies Huatai pointed out that under the old-for-new policy, the number of scrapped/replaced vehicles exceeded 2.9/3.7 million in 2024, driving automotive sales over 920 billion yuan. The notice at the beginning of January 2025 realized "increased scope", stimulating the release of pre-Chinese New Year car purchase demands, and is expected to further boost domestic new energy vehicles to seize market share from joint ventures, with top vehicle series sales continuing to strengthen, potentially driving passenger car retail sales in 2025 up by 2% year-on-year. Looking ahead to 2025, it is recommended to focus on vehicle companies with strong product cycles as elastic targets. At the same time, the PE valuations of leading heavy truck companies remain low, and maintaining a good dividend policy, suggesting an increase in conservative allocations. Zhongtai: Dips in the low position for Central SOEs and hard technology industry chain A Zhongtai research report stated that it is currently a good time to invest in Central SOEs at a low position and the hard technology industry chain. The continuous decline in market interest rates has increased the overall risk premium for Central SOEs. Dividend assets currently have a high long-term investment cost-effectiveness ratio. In terms of risks, continuous entry of long-term capital such as insurance funds, and the increase in fault tolerance rate of state funds will bring in long-term investment funds. The low positions of banking stocks, public utilities, and other sectors that align with financial risk prevention and safety direction are worth paying attention to. Currently, the continuous geopolitical risks between China and the US, "hard technology" is one of the main investment directions in fiscal policy. Among them, "hard technology" represented by military industry, drones, Siasun Robot&Automation, and commercial aerospace may be one of the most elastic global industry directions starting in 2025. Hot Sectors 1. Surge in limit-up stocks in the semiconductor industry chain The semiconductor industry chain saw a surge in limit-up stocks, with national large funds holding shares, storage chips, and lithography machines soaring. Hangwujun rose over 5% to a new high, Shanghai Bright Power Semiconductor Co., Ltd. rose by more than 10%, JCET Group Co., Ltd., Beken Corporation, Shenzhen King Explorer Science And Technology Corporation, Feilong Auto Components, and others had multiple limit-up stocks. Comment: Tianfeng research report believes that subsidies for products such as phones may drive the semiconductorBody needs. It is expected that more regions across the country will include mobile phones and other products in the subsidy range. Against the backdrop of AI boosting the user experience of new products, it is expected that new subsidies or accelerated consumer turnover will be encouraged. It is recommended to pay attention to the increase in demand for chips related to mobile phones, tablets, smart watches, and smart bands.2Siasun Robot&Automation concept continues to be strong The concept of Siasun Robot&Automation continues to be strong, with Suzhou MedicalSystem Technology seeing three consecutive trading limit up days, Zhejiang XCC Group seeing two consecutive trading limit up days, Jianshe Industry Group hitting a new high, and Shenzhen Ampron Technology, Ningbo Zhenyu Technology, Shanghai Hajime Advanced Material Technology, Wuxi Best Precision Machinery, among others, quickly rising. Comments: On the news front, the humanoid Siasun Robot&Automation industry has recently seen intense catalysis. Musk stated that if everything goes smoothly, Tesla's humanoid Siasun Robot&Automation production will increase tenfold by 2026. Previously, Huang Renxun reiterated at CES 2025 the arrival of the GPT era for humanoid Siasun Robot&Automation. 3AI companion concept rising The AI companion concept saw an initial rise, with Beken Corporation and Soho Holly Corporation both seeing two consecutive trading limit up days, Profit Cultural & Creative Group rising over 10%, and BXL, Rastar Group, Shifeng Cultural Development, Alpha Group, among others, following suit. Comments: On the news front, multiple AI companion products were showcased at this year's CES. Tombot company presented a mechanical pet dog called Jennie, specially designed to accompany Alzheimer's and other types of dementia patients; it can make dog sounds, wag its tail, but cannot interact with real animals. This article is reproduced from "Tencent Self-selected Stocks"; GMTEight editor: Wang Qiujia.