A-share midday report | Shanghai Composite Index falls by 0.25%, Little Red Book concept stocks continue to soar, industrial metal concepts decline.

January 15, the three major indexes of A-shares collectively opened lower, and the ChiNext Index once again tested lower levels. By the close, the Shanghai Composite Index fell by 0.25%, the Shenzhen Component Index fell by 0.78%, and the ChiNext Index fell by 1.59%. On the market, stocks related to the Xiaohongshu concept continued to surge, with multiple stocks such as Hangzhou Onechance Tech Corp., Shenzhen Ellassay Fashion, Inly Media Co., Ltd, Shanghai Laiyifen, Foshan Yowant Technology, Aimer Co., Ltd., HuiZhou Intelligence Technology Group, Inmyshow Digital Technology hitting the daily limit; the tourism sector started strong, with Zhang Jia Jie Tourism Group hitting the limit; banking stocks fluctuated higher, with China Merchants Bank rising nearly 3%; the pet economy concept saw strong gains, with Wenzhou Yuanfei Pet Toy Products, Tianjin Yiyi Hygiene Products hitting the limit; Siasun Robot&Automation concept remains active, with Shenzhen King Explorer Science And Technology Corporation hitting the limit for 5 consecutive days, and Zhejiang XCC Group also hitting the limit. On the downside, industrial metal concepts saw a decline, with Zijin Mining Group falling by over 5%. In terms of main funds, funds favored industries such as leisure food, internet e-commerce, and batteries; funds flowed out of the home appliance, semiconductor, and diversified financial industries. Institutional Perspectives: Looking ahead, Orient pointed out that 3140 points are likely to be the short-term bottom, with limited upside potential for the rebound. The initial target is set around 3300, and after the overall rise in sectors, differentiation will occur, with structural themes remaining the main feature of the market. Investors can seize the rare opportunity for a rebound before the Spring Festival. Galaxy Securities: Even if additional tariffs are imposed, the impact on the Renminbi will be weaker than in 2018 Galaxy Securities stated that looking ahead to 2025, from the four factors affecting the Renminbi exchange rate with the US dollar, the nominal economic growth rate of China and the US may be a positive supporting factor, while the monetary policies and foreign exchange supply-demand relationship between China and the US have a neutral impact. The central bank's exchange rate policy is a positive factor. Before substantial implementation of additional tariffs by the US, the Renminbi may fluctuate in the range of 7.1-7.3. The current environment facing the Renminbi is significantly different from the period of additional tariffs in 2018-2019, and even if additional tariffs are imposed, the impact on the Renminbi will be weaker than in 2018. First, the US has entered a cycle of interest rate cuts, while in 2018, the US was in a cycle of interest rate hikes; second, from the domestic perspective, this time China's fiscal expansion may start earlier, with the current government debt costs lower than economic growth and a high efficiency in the use of government debt, providing support for the exchange rate. Shenwan Hongyuan Group: Seeking clues on industries that are poised for spring dynamics Reviewing the industries that led the A-share market's "spring dynamic" rally from 2010 to 2024, it was found that these industries may be catalyzed by several factors: 1) policies; 2) industry trends; 3) performance catalysts; 4) overseas geopolitics, with policies being the most important factor, with most of the years of spring vibrancy uptrends being related to current policies or policy expectations. Below are cases of industries that have risen during the spring dynamic period since 2010 that are related to policies. In addition to the broad rally after the market circuit breaker in 2016, the weak spring dynamics in 2014, and the spring dynamics driven by overseas factors in 2022 and 2020, there were a total of 11 years of industries with strong policy-driven elements. If the "spring dynamic" arrives as expected in 2025, from the perspective of policy factors, the industries most likely to lead the rally are expected to be in the mass consumption linked to domestic demand, service-oriented consumption industries (social services, commerce and retail, beauty care, food, etc.), as well as emerging new technology directions that meet technological industry trends and policy push (low-altitude economy, humanoid Siasun Robot&Automation, AI application terminals), and it is recommended to focus on these. Orient: Limited upside potential for the rebound, with structural themes remaining the main feature of the market Orient pointed out that in the short term, stimulated by frequent policy easing, the market has rebounded, marking the first strong rebound since falling from 3400 to 3140 at the end of last year. This 3140 point is likely the short-term bottom, consistent with the previous judgment that the 3150 point area is a phase bottom, but the rebound is expected to have limited upside potential, with the first target set around 3300, and sector-wide gains will be followed by differentiation, with structural themes remaining the main feature of the market. Investors can seize the rare opportunity for a rebound before the Spring Festival. Hot Sectors: 1. Xiaohongshu concept continues to be strong. The Xiaohongshu concept continues to be strong, with Hangzhou Onechance Tech Corp., Foshan Yowant Technology, Inmyshow Digital Technology, Inly Media Co., Ltd., Aimer Co., Ltd., Shenzhen Ellassay Fashion, Guangdong Piano Customized Furniture hitting the daily limit. FS Development Investment Holdings, Leo Group Co., Ltd., Shanghai Kaytune Industrial, Shanghai Yaoji Technology, and other stocks opened higher by over 7%. Review:On the surface, Xiaohongshu International Edition has topped the US App Store's free chart. Tianfeng expressed optimism for Xiaohongshu International Edition to continue expanding its user base and monetization opportunities. There is basically no isolation between the domestic and international content of Xiaohongshu, and overseas users can directly register with their foreign phone numbers, with low migration costs.2. Siasun Robot&Automation concept stocks remain active Siasun Robot&Automation concept stocks continue to be active, with Zhejiang XCC Group hitting limit up for 4 out of 5 days, Shenzhen King Explorer Science And Technology Corporation and Zhongyeda Electric also hitting limit up. Aishida Co., Ltd., Hanwei Electronics Group Corporation, China Leadshine Technology rose by over 5%, while Greatoo Intelligent Equipment Inc., Guilin Fuda Co., Ltd., Zhejiang Fore Intelligent Technology, Zhejiang Sanhua Intelligent Controls and others followed suit. Comment: Century Securities research report stated that Tesla humanoid Siasun Robot&Automation production exceeded expectations, and the industry is expected to enter a fast lane of development. 3. Pet economy concept sees volatility and rise The pet economy concept has seen volatility and rise, with Tianjin Yiyi Hygiene Products and Wenzhou Yuanfei Pet Toy Products hitting limit up, while Petpal Pet Nutrition Technology was close. LUSCIOUS, Hangzhou Tianyuan Pet Products, Yantai China Pet Foods, Gambol Pet Group and others followed the trend. Comment: On the news front, Tianjin Yiyi Hygiene Products announced that it expects its net profit for 2024 to increase by 91.76% to 117.91% compared to the previous year. In addition, data from iResearch Consulting shows that by 2028, the pet economy market size is expected to reach 115 billion yuan. This article is reprinted from "Tencent Stock Picks"; GMTEight Editor: Wang Qiujia.