A-share market midday review | The GEM index soared by over 3%, with more than 4900 stocks rising in the whole market. The photovoltaic and AI sectors collectively surged.

On February 7th, foreign capital is bullish on Chinese assets! A shares surged in the morning, with the Shanghai Composite Index returning to 3300 points and over 4900 stocks rising. By the end of the day, the Shanghai Composite Index rose by 1.33%, the Shenzhen Component Index rose by 2.52%, and the ChiNext Index rose by 3.63%. After experiencing a shock from China's Deepseek, two major Wall Street investment banks have updated their ratings on the Chinese market. Deutsche Bank expects the "valuation discount" of Chinese stocks to disappear and predicts that Chinese A shares and Hong Kong stocks may continue to rise; Goldman Sachs believes that Chinese technology stocks have a 20% opportunity for returns after being revalued. On the market, photovoltaic concept stocks led the gains, with Hainan Drinda New Energy Technology and others hitting their daily limit; DeepSeek concept stocks continued to ferment, with MeiG Smart Technology hitting the limit for five consecutive days; BYD Company Limited's smart driving concept stocks remained active, with Guangzhou Tongda Auto Electric and others hitting their daily limit; brokerage stocks rose sharply, with real estate and consumer electronics leading the gains. The only sector that fell was the banking sector. In terms of main funds, funds favored photovoltaic equipment, IT services, and passenger cars; funds fled from the semiconductor, advertising and marketing, and computer equipment industries. Institutional views Looking ahead, Huatai pointed out that for the rebound to continue, it is necessary to observe the sustainability of the expansion of trading volume in the follow-up of the two markets. Orient: in the short term, the Shanghai Composite Index is expected to challenge the 3300 area Orient pointed out that after the holiday, the outbreak of technology stocks undoubtedly received a boost from DeepSeek. Its low cost and high performance advantages will drive the market to re-evaluate the technical potential of Chinese technology companies in the AI race. The market image will change from following to surpassing in the past, and the valuation given by the market to the leading technology companies in China and the United States will converge, which will be beneficial for the continued performance of the technology sector in the future and investors are advised to grasp it. Overall, the market hot spots are spreading, with trading volume increasing moderately, indicating a resurgence of the index. In the short term, the Shanghai Composite Index is expected to challenge the 3300 area, and the market expectation of a spring rally is expected to come true. EB SECURITIES: The momentum of the rebound is expected to continue, with technology stocks continuing to play a leading role EB SECURITIES pointed out that looking ahead, the market's large increase in trading volume and the warming of investor sentiment and obvious capital inflows suggest that the market's rebound momentum is likely to continue, with technology stocks likely to continue to play a leading role. Direction: AI computing power concept. Due to the overload of servers, DeepSeek announced the suspension of API service recharge on February 6th. In this context, DeepSeek urgently needs to expand its computing power infrastructure to meet the access needs of more users, which is expected to drive the construction of AI computing power, benefiting companies upstream of DeepSeek involved in computing power construction. Huatai: for the rebound to continue, the sustainability of the expansion of trading volume in the follow-up of the two markets needs to be observed Huatai pointed out that from the current perspective, if the rebound momentum is to continue, it is necessary to observe the sustainability of the expansion of trading volume in the two markets. On the other hand, the Shanghai Composite Index may have a chance to break through and stabilize above the 60-day moving average, which may open up a space for the rebound to move up and get rid of the adjusting posture. Looking ahead, market expectations for a spring rally remain, with the upcoming two sessions, and market expectations for policies will gradually rise. The hot topics emerging during the two sessions may create some thematic investment opportunities that will be of interest to the market. Popular sectors 1. Photovoltaic sector surged Photovoltaic concept stocks surged, with Hainan Drinda New Energy Technology, Shuangliang Eco-Energy Systems, Luoyang Northglass Technology and others hitting the daily limit, Kbc Corporation, Ltd., Shanghai Aiko Solar Energy, Gansu Golden Solar, Tongwei Co., Ltd. and others surging significantly. Review: According to the TrendForce report, during the holiday period, silicon materials were shipped in accordance with the previous order sequence, relatively stable. If downstream production is restored in March, there may be expectations of a price increase for silicon materials. Huatai pointed out that it is optimistic about the high prosperity of new photovoltaic installations in 2025, and the industry chain is expected to see a simultaneous increase in quantity and price. 2. DeepSeek concept hot DeepSeek concept stocks continue to ferment, with MeiG Smart Technology hitting the limit for five consecutive days, Qingyun Technology, Youked, Hang Zhou Iron & Steel hitting the limit for three consecutive days, and Guangzhou Anyka Microelectronics, Hangjin Technology, Xinjiang Sailing Information Technology and others rallying. Review: China Securities Co.,Ltd. research report believes that Deepseek is driving the reevaluation of domestic confidence in the AI+ sector, and AI+ is still the core theme. The breakthrough progress of Deepseek is a major positive for the industry logic of AI+, overturning the inherent cognition in the industry that China is lagging behind its American competitors by many years in the AI competition, boosting confidence in China's technological competition, or promoting a separate market trend for the domestic AI+ industry after the Spring Festival globally. 3. BYD Company Limited's smart driving concept is active BYD Company Limited's smart driving concept stocks remained active, with LianChuang Electronic Technology, Guangzhou Tongda Auto Electric, AnHui Higasket Plastics, ZYNP Corporation and others hitting the daily limit, DongGYutong Optical Technology, Bethel Automotive Safety Systems, Longhorn Auto etc. have all seen increases in their stock prices.Review: On the news front, BYD Company Limited will hold a smart strategy release conference at its headquarters in Shenzhen on February 10th at 19:30. The market is paying attention to its high-level intelligent driving assistance system "Eye of Tian Shen". Minsheng Securities pointed out that intelligent driving is gradually entering a turning point in technology, user acceptance, and business model. It is optimistic about the layout of intelligence being relatively advanced, with product cycles and brand cycles trending upward for high-quality independent car companies. This article is reprinted from "Tencent Stock Selection", GMTEight Editor: Wang Qiujia.