A shares midday review | Shanghai Composite fell by 0.12% Real estate and consumer sectors rise High-priced stocks retreat

On February 13, the market opened with a slight decline in the three major indexes and over 3700 stocks were in the green. By midday, the Shanghai Composite Index fell 0.12%, the Shenzhen Component Index fell 0.47%, and the ChiNext Index fell 0.3%. The turnover in the first half of the day was 1.15 trillion yuan, an increase of 150.1 billion yuan from the previous trading day. In terms of market performance, the market style switched with consumer stocks rebounding, leading sectors such as liquor, pork, and retail. The real estate sector rose, with stocks such as Deluxe Family, China Fortune Land Development, and Beijing Electronic Zone High-tech Group hitting the trading limit. The film and media sector continued its strong performance, with Beijing Enlight Media hitting the limit to reach a new high. The solid-state battery sector surged, with Jiangsu Ruitai New Energy Materials and Hunan Lead Power Technology Group hitting the limit. The banking sector was active, with Industrial and Commercial Bank of China hitting a new high. However, high-priced stocks saw a downturn with stocks like MeiG Smart Technology, Shenzhen Zhaowei Machinery & Electronics, and Zhejiang Daily Digital Culture Group hitting the limit down. In terms of fund flow, main funds flowed into industries such as liquor, batteries, advertising, black household appliances, and breeding, while funds flowed out of industries such as IT services, semiconductors, software development, communication equipment, and computer equipment. Institutional Views Looking ahead, EB SECURITIES believes that with current positive expectations in terms of policies and funding, the spring market rally is likely to continue. 1. EB SECURITIES: Spring Market Rally Entering a Good Phase, Focus on AI Computing Power Infrastructure and Applications EB SECURITIES believes that as the National People's Congress and the Chinese People's Political Consultative Conference approach, the market's expectations for policies such as increased deficit ratios and expanded issuance of national debt are further enhanced. In addition, the total amount of Medium-term Lending Facilities (MLF) maturing in January and February this year is close to 1.5 trillion yuan, and it is expected that the central bank will cut reserve requirements to maintain market liquidity. Given the current positive expectations in terms of policies and funding, the spring market rally is likely to continue. In terms of allocation, the focus should be on investment opportunities in AI computing power infrastructure (cost-effective ASIC chips, optical modules, liquid cooling, etc.) and applications (AI glasses, AI smartphones, as well as AI+ healthcare, education, etc.). As a heavyweight conference approaches, there may be opportunities for technology themes such as low-altitude economy and satellite internet. 2. Huaan: High-growth Technology Trends Promising, Strong Seasonal Infrastructure Opportunities Emerging Huaan believes that post-holiday market risk appetite has significantly increased, trading volume has rapidly expanded, and opportunities are abundant. The most dazzling opportunity lies in the growth technology sector catalyzed by companies such as DeepSeek and Siasun Robot & Automation, which is still in the early stages of the market and has ample room for growth. Additionally, the strongly predictable seasonal market trends in infrastructure construction are beginning to unfold and are in the early stages of the market, making them the preferred direction for allocation. 3. Soochow: Market Style Still Dominated by Growth and Manufacturing Soochow points out that overall, market sentiment remains active, with rotation adjustments being supported by funds. The period leading up to the two sessions is a vacuum for macroeconomic policy and industry policy expectations, with relatively active funds and high flexibility. Small-cap styles with high resilience and imagination have higher returns than large caps, indicating that technical sectors are beginning to rotate. The market style may still be dominated by growth and manufacturing sectors, with technology remaining promising. Popular Sectors 1. Real Estate Sector Strengthens The real estate sector was strong, with Wolong Resources Group and Beijing Electronic Zone High-tech Group hitting the trading limit, and other stocks such as China Fortune Land Development, Risesun Real Estate Development, Seazen Holdings, Guangdong Shirongzhaoye, and Financial Street Holdings following suit. Comments: On the news front, it was reported that a new policy on housing provident funds is expected to be implemented in the Shenzhen market. In response, the Shenzhen Housing Provident Fund Center stated that it is currently applying for approval according to regulatory procedures. Huatai stated that as the real estate industry adjusts and stabilizes, and with the easing of policies related to equity financing and mergers and acquisitions for real estate companies, a new wave of more profound transformation may be taking shape. 2. Film and Television Stocks Strong Film and television stocks continued their strong performance, with Beijing Enlight Media rising by over 15%, surpassing 190% in the past 7 trading days after the festival, with a total market value surpassing 80 billion yuan and hitting a new high. Stocks such as Bona Film Group, Zhejiang Huace Film & TV, Zhejiang Talent Television and Film, Hengdian Entertainment, and China Film Co., Ltd. also rose. Comments: According to online platform data, as of now, the total box office revenue (including presales and overseas box office) of "Ne Zha" has surpassed that of "Deadpool and Wolverine," entering the top list of global box office history. 20 Asian films have become the first to enter the global box office top 20. Ping An Securities stated that based on the box office results of the 2025 Spring Festival season, high-quality film content has a strong driving effect on the box office. It is recommended to pay attention to top film and television companies with high-quality content reserves and content production, as well as the performance elasticity of cinema chains and ticketing companies.3. Pork stocks rebound Pork, chicken and other breeding stocks rebounded, with both Hunan Zhenghong Science And Technology Develop and Leshan Giantstar Farming & Husbandry Corporation hitting the limit up. Stocks such as Hunan New Wellful, Yunnan Shennong Agricultural Industry Group, Muyuan Foods, New Hope Liuhe, Wens Foodstuff Group, and Tangrenshen Group also rose. Review: According to data from the National Bureau of Statistics, in January, the prices of pork and vegetables rose by 13.8% and 2.4% respectively compared to the same period last year. Huafu Securities research report stated that the industry's production capacity is slowly recovering, and pig enterprises with excellent cost control are expected to extend their profit cycle. The current valuation has been adjusted to the bottom, and industry catalysis is expected after the Spring Festival. 4. Solid-state battery sector rises The solid-state battery concept went against the trend, with Jiangsu Ruitai New Energy Materials hitting the limit up by 20%. Companies like Hunan Lead Power Technology Group, Fuxin Dare Automotive Parts, Shanghai Emperor of Cleaning Hi-Tech, Xtc New Energy Materials (Xiamen) Co., Ltd., NAKNOR, and Jiangsu Guotai International Group followed suit. Review: On the news front, modern cars will officially showcase their full solid-state electric vehicle battery pilot production line to the public in March 2025, and plan to invest over $9 billion in electric vehicle battery technology research and development over the next decade. Chongqing Changan Automobile recently announced plans to gradually mass-produce full solid-state batteries by 2027, with the first functional prototype of the solid-state battery expected to be unveiled in 2025.