A-share Market Review | The market opened lower and rose higher, with the Shanghai Composite Index closing up 0.18%. The semiconductor sector saw a big increase.

Today, the market opened low and rose steadily. As of the close, the three major indexes collectively rose, with active funds aggressively entering the semiconductor, 5G, and other technology sectors. ZTE Corporation and Semiconductor Manufacturing International Corporation, the two leading companies, had a trading volume exceeding a hundred billion. The market turnover decreased by over one trillion compared to the previous trading day. Regarding the sharp rise in the semiconductor sector, according to securities analysts in China, there were two main news developments. The first is that on the 16th, a spokesperson for the Chinese Ministry of Commerce stated that domestic industries in China have the right to request a trade remedy investigation on imported chips from the US, and the investigating agency will initiate the investigation according to the law. The second news is that the US Department of Commerce released related regulations on chip exports, based on control measures as of October 7, 2022, October 17, 2023, and December 2, 2024, and further strengthened them. Domestic substitution logic was reinforced once again. In other hot spots, stocks with forecasted increases in annual reports continued to be strong, with multiple stocks like Hunan Sundy Science And Technology and Suzhou Hycan Holdings hitting their daily limit for gains. The data center power concept partially recovered, with Shanghai Cooltech Power rising by 20%. Debt-based concept stocks surged, with Everbright Jiabao and Cinda Real Estate hitting their daily limit for gains. Little Red Book concept stocks faltered, with the leading Shanghai Laiyifen dropping to its daily limit, while KAISA JiaYun Technology Inc. and FS Development Investment Holdings fell significantly. Retail, community group buying, and small home appliance consumer stocks weakened. Overall, in the two markets, stocks were evenly split between gains and losses. Looking at individual stocks, there were 2818 stocks that rose and 2313 that fell, with 259 remaining flat. There were a total of 50 stocks hit their daily limit for gains and 3 stocks hit their daily limit for losses. Fund Flows: Today, major funds favored investments in specialized equipment, real estate development, and comprehensive sectors. Stocks with the most significant net inflows of major funds included Greatoo Intelligent Equipment Inc., Sichuan Development Lomon, and Guilin Fuda Co., Ltd. Important News Highlights: 1. IEA: Global nuclear power generation capacity will reach a new high in 2025. IEA released a report on the 16th, stating that with increased investments, technological advancements, and policy support, the development of nuclear energy will accelerate. The electricity generation capacity of nearly 420 nuclear reactors worldwide is expected to reach a new high in 2025. The report also mentioned that there is over 70 gigawatts of new nuclear power capacity under construction globally, one of the highest levels in the past 30 years. Over 40 countries and regions plan to expand the role of nuclear energy in their energy systems, with China having the majority of nuclear projects under construction. Currently, nuclear power accounts for nearly 10% of global electricity generation, making it the second-largest low-emission source of electricity after hydropower. 2. Shanxi Guoxin Energy Corporation: Vehicle ownership exceeds 30 million, reaching 31.4 million. According to statistics from the Ministry of Public Security, the ownership of new energy vehicles has reached 31.4 million, with 11.25 million new registrations nationwide. By the end of 2024, the total number of vehicles owned by Shanxi Guoxin Energy Corporation reached 31.4 million, accounting for 8.90% of the total number of vehicles. Among them, the ownership of pure electric vehicles is 22.09 million, accounting for 70.34% of new energy vehicle ownership. In 2024, 11.25 million new energy vehicles were newly registered, accounting for 41.83% of the total number of new registrations and an increase of 3.82 million compared to 2023, a growth of 51.49%, from 1.2 million in 2019 to 11.25 million in 2024, showing a trend of rapid growth. 3. National Bureau of Statistics: China's GDP in 2024 was 134.91 trillion yuan, an increase of 5.0% from the previous year. According to data released by the National Bureau of Statistics, China's GDP in 2024 was preliminarily calculated at 1349.084 billion yuan, an increase of 5.0% compared to the previous year at constant prices. By industry, the value added of the primary industry was 914.14 billion yuan, an increase of 3.5% from the previous year; the value added of the secondary industry was 4920.87 billion yuan, up 5.3%; and the value added of the tertiary industry was 7655.83 billion yuan, a 5.0% increase. By quarters, GDP grew by 5.3% year-on-year in the first quarter, 4.7% in the second quarter, 4.6% in the third quarter, and 5.4% in the fourth quarter. Quarter-on-quarter, GDP grew by 1.6% in the fourth quarter. Future Market Analysis: 1. CITIC SEC: Trump's inauguration imminent, external disruptions will gradually become clear CITIC SEC pointed out that the core external variable currently facing the market is Trump's inauguration on January 20th. CITIC SEC believes that during Trump's first month in office, attention should be paid to both domestic and foreign policies. In terms of the economy, there may be executive orders signed regarding tariffs, easing administrative regulations, encouraging the development of cryptocurrencies, and negotiating tax reduction plans with Congress. In the energy sector, there may be executive orders supporting traditional energy production, strengthening the protection of critical resources, and re-exiting the Paris Agreement. In the social sector, there may be executive orders strengthening border control, deporting illegal immigrants with violent criminal records, and eliminating some diversity programs. In terms of foreign affairs, proposals to end the Russia-Ukraine conflict may be implemented, with pressure on NATO and other allied countries to increase defense spending. In terms of tariff timing, CITIC SEC believes that the global universal tariff proposed by Trump may face certain obstacles, and the trend of Chinese companies going global remains a long-term trend, while the imposition of 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, as Trump takes office, external disruptive factors will gradually become clear, and counter-cyclical adjustments and stable market policies are worthy of expectation. 2. Huaxi: AThe spring market cycle is brewing, and "new quality stocks" are still the main focus of investment.Huaxi believes that with the central bank taking action to stabilize the exchange rate, the CSRC once again emphasizing "stabilizing the stock market", and discussions in the US on progressive tariffs, the renminbi exchange rate against the US dollar has stabilized, and investors' concerns about negative factors in the A-share market have been alleviated. In addition, there are signs of improvement in the micro-liquidity of the stock market, with trading volume in the two markets returning to over a trillion yuan in the past two trading days, and financing funds once again turning to net buying. Looking ahead, after the inauguration of US President-elect Trump, the A-share market is expected to once again trade on the policy expectations of the "Two Sessions", and a spring market rally may be brewing. In terms of industry allocation, themes related to "new quality bulls" remain the main theme of the spring market: AI+, humanoid Siasun Robot & Automation, low-altitude economy, domestic substitution, etc. Huaan: Sensitive period of external disturbances, high dividends are expected to be further strengthened Overseas risks continue to accumulate, and the market is expected to continue to fluctuate. Recently, the NDRC and the Ministry of Finance announced some measures, which overall meet expectations, but the scale of consumer goods "trade-in" and the extent of the increase in the deficit rate still need to wait for the announcement at the Two Sessions in March, with limited impact on market confidence. In addition, overseas risks continue to accumulate: firstly, Trump continues to implement anti-globalization policies, and market concerns about exports and economic impact continue to ferment. Secondly, the minutes of the December FOMC meeting showed that Fed officials disagreed on interest rate cuts, with a high probability of a shift towards a hawkish path, which could curb preferences for US stocks and global capital markets. Therefore, it is expected that the market will continue to fluctuate until there is significant improvement in economic fundamentals or domestic policies are further enhanced. Meanwhile, the continued accumulation of external risks may exert a certain level of restraint on risk appetite. In terms of allocation, the direction of high dividends is expected to be further strengthened, with agriculture, animal husbandry, and communication also worth paying attention to. Meanwhile, the implementation of the "Two New" policies may gradually materialize for the automobile, home appliance, and electronics industries. This article is reprinted from "Tencent Self-selected Stocks", edited by GMTEight: Liu Jiayin.