A-shares' midday report | Shanghai Composite Index rose 0.4%, chip stocks collectively strengthened, and several stocks with expected increase in annual reports surged.

On January 17, the A market opened with narrow fluctuations, and the three major indices rose slightly. By the close, the Shanghai Composite Index was up 0.4%, the Shenzhen Component Index was up 0.68%, and the ChiNext Index was up 0.74%. On the market, most industries fell more than they rose, with fishing, general retail, and advertising marketing industries leading the declines; while wind power equipment, energy metals, and electric motor II industries led the gains. In terms of main funds, funds favored the internet e-commerce and energy metal industries, while capital fled the general retail and auto parts industries. Institutional Perspectives: Looking ahead, Huaxi believes that after the inauguration of US President Trump, A-share markets are expected to trade on the expectations of "two sessions" policies again, and a spring rally may be brewing. CITIC SEC: Trump's inauguration will gradually clarify external disturbances. CITIC SEC pointed out that the core external variable facing the current market is Trump's inauguration on January 20. CITIC SEC believes that during Trump's first month in office, attention should be paid to both domestic and foreign policies, such as signing tariffs, relaxing administrative regulations, encouraging cryptocurrency development, negotiating tax cuts with Congress; signing executive orders to support traditional energy production in the energy sector, strengthen key resource security, and withdraw from the Paris Agreement again in terms of energy; signing executive orders to strengthen border control, deport illegal immigrants with a history of violent crime, and eliminate certain diversification projects in terms of society; in terms of foreign affairs, Trump may introduce a plan to end the conflict between Russia and Ukraine, and pressure allies like NATO to increase military spending. In terms of tariff pace, CITIC SEC believes that the global universal tariff proposed by Trump may face certain obstacles, and the overseas layout of Chinese companies is still a long-term trend, while additional tariffs on China may follow a certain industry priority order. For the domestic capital market, it is expected that in the second half of January, with Trump taking office, external disturbances will gradually become clear, and counter-cyclical adjustments and market stabilization measures are worth looking forward to. Huaxi: A spring rally may be brewing, "new quality bull market" remains the main theme for allocation. Huaxi believes that with the Central Bank taking measures to stabilize the exchange rate, the Securities Regulatory Commission emphasizing "stabilizing the stock market" at a recent meeting, and discussions in the US about progressive tariffs, the renminbi has stabilized against the dollar, and the concerns of investors about negative factors affecting A-shares have been alleviated. In addition, there are signs of improvement in market micro-liquidity, with turnover in the two markets reaching over a trillion yuan for two consecutive trading days, and margin funds once again turning net buyers. Looking ahead, after US President Trump takes office, A-share markets are expected to trade on expectations of "two sessions" policies again, and a spring rally may be brewing. In terms of industry allocation, themes related to "new quality bull markets" remain the main theme of the spring rally: AI+, Siasun Robot & Automation, low-altitude economy, and domestic substitution. Huaan: Sensitive period of external disturbances, high dividends expected to further strengthen. Overseas risks continue to accumulate, and the market is expected to continue to fluctuate. In a recent announcement, the Development and Reform Commission and the Ministry of Finance announced some measures that overall meet expectations, but the scale of consumer goods "swap old for new" and the increase in the deficit rate still need to be announced at the Two Sessions in March to provide limited support to the market. In addition, overseas risks continue to accumulate, with concerns about Trump continuing to implement anti-globalization policies, market concerns about exports and economic impact intensifying. Another risk factor is that the minutes of the December Federal Reserve meeting show that Fed officials are increasingly divided on interest rate cuts, and the probability of a shift towards a hawkish path has increased significantly, suppressing preferences for US stocks and global capital markets. Therefore, overall, until there is significant improvement in the economic fundamentals or domestic policies to counterbalance, the market is expected to continue to fluctuate. Continued accumulation of external risks could potentially suppress risk appetite. In terms of allocation, the direction of high dividends is expected to be further strengthened, and sectors like agriculture and animal husbandry, as well as communications, are also worth paying attention to. The automotive, home appliance, and electronics sectors may gradually benefit from the implementation of the "two new" policies. Hot Sectors: 1. Several stocks expected to increase in annual reports surged. Several stocks expected to increase in annual reports surged at the opening, with Hunan Sundy Science and Technology, Suzhou Hycan Holdings, and Lianhe Chemical Technology all hitting the limit up, while Jiangsu Bojun Industrial Technology and Zhejiang Haiyan Power System Resources Environmental Technology opened more than 10% higher. Comment: On the news front, Hunan Sundy Science and Technology is expected to see a year-on-year increase in net profit of 157%-183% in 2024; Jiangsu Bojun Industrial Technology is expected to see a year-on-year increase in net profit of 90%-120% in 2024; Suzhou Hycan Holdings is expected to see a year-on-year increase in net profit of 730%-849% in 2024; Lianhe Chemical Technology is expected to turn a loss into a profit of 90-135 million yuan in 2024. 2. Wind power sector on the rise. The wind power sector rose at the open, with Titan Wind Energy hitting the limit up, and Ningbo Orient Wires & Cables, Luoyang Xinqianglian Slewing Bearing, Dajin Heavy Industry, Shanghai Taisheng Wind Power Equipment, and Jiangsu Zhongtian Technology leading the gains. Comment: According to Cai Xin Securities, all wind power projects have now achieved grid parity, and the rush for subsidies has naturally lost its momentum. Referring to the average growth rate and bidding situation of land wind power in recent years, Cai Xin Securities predicts 95GW of new land wind power and 15GW of offshore wind power. It is still expected to see the new wave of growth by 2025.A surge in wind power installations.3. Siasun Robot & Automation concept stocks rise again Siasun Robot & Automation concept stocks opened strong again, with Shenzhen King Explorer Science And Technology Corporation hitting its seventh consecutive limit up, Ningbo Zhongda Leader Intelligent Transmission also reached its limit up, Zhejiang Fore Intelligent Technology, Hangzhou Kaierda Welding Robot, Kinco Automation (Shanghai) Co., Ltd., Zhejiang Changsheng Sliding Bearings, Shenzhen Manst Technology, Dianguang Explosion-proof Technology, Zhejiang XCC Group all rose by more than 5%. Commentary: On the news front, on the evening of January 16th, Unitree Siasun Robot & Automation released a video of their humanoid Siasun Robot & Automation Unitree G1 walking and running. According to the introduction, this Siasun Robot & Automation has undergone bionic and dynamic upgrades to achieve smooth walking and humanoid running. This article is reprinted from "Tencent Self-selection Stocks"; GMTEight Editor: Wang Qiujia.