Chinese A-shares midday review: Three major indexes hit bottom and rebound, Shanghai Composite Index rises 0.17% at midday, semiconductor and other technology stocks soar.

On January 21st, the three major indexes bottomed out and collectively rose in the morning session. By midday, the Shanghai Composite Index rose by 0.17%, the Shenzhen Component Index rose by 0.54%, and the ChiNext Index rose by 0.32%. Over 3400 stocks in the two markets fell, with a trading volume of 775.7 billion yuan in half a day, a decrease of 12.2 billion yuan from the previous day. In terms of the market, the market sentiment continued to be weak, with most thematic concepts trending downward. Siasun Robot & Automation and its related industries continued to strengthen, the real estate sector rebounded, the autonomous and controllable concepts such as semiconductors and Semiconductor Manufacturing International Corporation rallied, and the consumer electronics and AI glasses concepts were strong. In terms of declines, problematic stocks collectively plunged, with several stocks hitting limit-down, and the Xiaohongshu concept continued to decline. The photovoltaic equipment and battery industries fell collectively, and concepts related to outbound expansion such as apparel, home textiles, household appliances, and CRO were also trending downward. In terms of main funds, funds favored real estate, semiconductors, and consumer electronics, while funds fled from photovoltaic equipment and components. Institutional viewpoints Looking ahead, Orient pointed out that with the easing of external negative factors, the export chain, which had performed poorly in the past, may benefit directly, and both internal and external positive factors are gradually accumulating, forming the basis for a rebound before the Spring Festival. Guotai Junan: The market is expected to gradually stabilize, industry allocation focuses on past performance, valuation, and business conditions Guotai Junan stated that the market is expected to gradually stabilize, with industry allocation focusing on past performance, valuation, and business conditions. At the current stage, the expectation of loose monetary policy under stable exchange rates has been postponed, and historical experience shows that this stage is often at the bottom position, and subsequent reserve cuts and interest rate cuts are expected to lead to a significant rebound in the market. This round of changes is different in that the decision-making level's attitude towards the economy is clear, and high-frequency data such as December PMI, production, and consumption help stabilize economic expectations, which could lead to a quicker turnaround in the market. In terms of industry allocation, it is recommended to focus on three areas based on historical experience: a, industries with low valuations and strong past performance that are likely to continue, such as machinery (engineering machinery/Siasun Robot & Automation) and household appliances. b, industries with improving business conditions, such as defense, consumer goods, and semiconductors. c, early positioning in non-banking sectors, with the expectation that subsequent monetary policy measures could lead to a market rebound. Huaxi: The A-share market will usher in a "spring market" at the end of January and beginning of February Huaxi believes that the A-share market will usher in a "spring market" at the end of January and beginning of February. Along with the oversold rebound in the A-share market this week, the main factors that have suppressed market risk appetite in the past have been greatly alleviated: first, the friendly phone call between the leaders of China and the United States and the Trump team's discussion of progressive tariffs have eased concerns about the big-power game between China and the United States, stabilizing the RMB exchange rate; second, this year's pre-announcement of annual report performance by listed companies has been released early, and performance risks have been adequately mitigated. In addition, local meetings show that economic growth targets in various regions have been set positively, boosting market confidence in growth-stabilizing policies. Looking ahead, the A-share market is currently in a high-cost-effective allocation range, and as investor risk appetite returns, a round of spring market trends will gradually unfold, and active participation is recommended. BOC International: Growth enters a year-round allocation window BOC International believes that growth has entered a year-round allocation window. BOC International reviewed the liquidity and A-share trends on the eve of the Spring Festival since 2017 and found that the trend of liquidity rates measured by DR007 or GC001 is not the decisive factor for the rise and fall of A-shares before the holiday. The relatively loose liquidity environment can provide positive support for A-shares: in the years when liquidity rates declined in 2019, 2021, and 2024, the main indices of A-shares were likely to rise; but in the years when liquidity rates rose in 2023 and 2017, the A-share market did not all weaken, and the incremental capital brought by exchange rate and basic expectations became important support for these two rounds of A-share pre-holiday trends. Currently, there are many uncertainties in the pre-holiday market, and there may be a strong wait-and-see sentiment. However, with the current implementation of loose monetary and fiscal policies, the micro-liquidity of the market is still acceptable, the overall trend of A-shares remains upward, but the magnitude and pace of the trend require confirmation of loosening at the aggregate level and expectations of a rebound in domestic demand. After experiencing adjustments since the fourth quarter, the short-term recovery momentum of growth style is strong, combined with the pre-holiday liquidity environment, the short-term advantages of growth stocks become more prominent. Orient: Many positive factors are gradually accumulating, forming the basis for a rebound before the Spring Festival In the short term, theme investment is active again, with some hotspots such as humanoid Siasun Robot & Automation, AI applications, and other strong-lasting themes, showing a clear trend of profitability. Additionally, external negative factors have eased, benefiting the previously underperforming export chain directly, with both internal and external positive factors gradually accumulating, forming the basis for a rebound before the Spring Festival. In terms of industry allocation, the main focus on high-risk preference varieties is on pharmaceuticals and non-ferrous metals, while theme investment focuses on central SOE mergers and acquisitions, technology themes, and other sectors. Popular sectors 1. Rise in autonomous and controllable concepts Semiconductors, Semiconductor Manufacturing International Corporation, and other autonomous and controllable concepts have risen, with Rockchip Electronics, Beken Corporation hitting the limit-up, and Espressif Systems, Ecar Technology, and others rising by more than 10%. 2. Rebound in the real estate sector The real estate sector rebounded, with Wolong Resources Group, Macrolink Culturaltainment Development hitting the limit-up, and China VankeNKE Co., Ltd. once hit the limit up.Review: On the news front, Kang Yi, the director of the National Bureau of Statistics, recently stated at a press conference organized by the State Council Information Office that since September, the real estate market has shown positive changes, with the sales area and sales volume of new commercial housing in the fourth quarter increasing by 0.5% and 1.0% respectively compared to the same period last year, reversing the previous continuous decline trend. 3. Siasun Robot&Automation sector is active again Human-like Siasun Robot&Automation, reducers, and other industries in the Siasun Robot&Automation chain continue to strengthen. Fibocom Wireless Inc., MH Robot & Automation 20CM hit the limit up, Tangshan Jidong Equipment And Engineering, Jianshe Industry Group also hit the limit up. Review: On the news front, recently, Gong Wei, a member of the Provincial Political Consultative Conference and vice president of Wuhan University, introduced to reporters that Tianwen is moving from the laboratory to the production line, planning to mass-produce by 2025 and build a research and development manufacturing production line. Currently, some supermarkets and catering companies are actively seeking cooperation and eagerly looking forward to the application of this human-like Siasun Robot & Automation to terminals. This article is reposted from "Tencent Stock Picks"; GMTEight Editor: Wang Qiujia.