A-shares midday report | GEM index fell 0.79% in the morning, agricultural stocks strengthened against the trend, AI applications side called back

On February 24th, the A-shares fluctuated and adjusted in the morning session. By the closing bell, the Shanghai Composite Index fell by 0.11%, the Shenzhen Component Index fell by 0.02%, and the ChiNext Index fell by 0.79%. In terms of market performance, the agricultural sector surged with Jiangsu Nonghua Intelligent Agriculture Technology, Thinker Agricultural Machinery, and others hitting their daily limit up. The data center concept showed repeated strength, with power and liquid-cooled server leading the way. Siasun Robot & Automation concept stocks rebounded, with over 10 stocks hitting their limit up. State-owned cloud concept stocks were active again, with COSCO SHIPPING Technology hitting the limit up. In addition, sectors like low-altitude economy, food consumption, animal husbandry, and real estate were active. On the downside, AI application sector saw a correction, with education and gaming leading the decline, while pharmaceuticals, consumer electronics, and securities sectors were among the top losers. Looking at fund flows, main funds flowed into industries like automotive parts, liquor, automation equipment, military electronics, and new metal materials, while flowing out of IT services, communication services, software development, semiconductors, and communication equipment. Institutional Views: Looking ahead, China Securities Co., Ltd. pointed out that although the technology sector has seen significant gains recently, the spring offensive is not over, with a clear focus on AI+. 1. China Securities Co., Ltd.: The Spring Offensive is Not Over China Securities Co., Ltd. believes that for global funds, the recognition of Chinese technology stocks has been increasing, while concerns about the weakening trend of the U.S. economy are evident. Although the technology sector has seen significant gains recently, the spring offensive is not over, with a clear focus on AI+. The current market environment is stable, and macroeconomic logic is currently giving way to industry trends. The technology stock market offensive is not over yet. Any short-term trading overheating causing a pullback is not expected to mark the end of the market movement, but rather an opportunity for further positioning and offensive moves. Current policy expectations and industry trends should be closely monitored. Industries such as the internet, communication, electronics, computers, media, and non-ferrous metals are recommended to be focused on. 2. Huatai: Industry Trends May Further Drive Asset Revaluation Huatai believes that the A-shares showed a volatile upward trend last week, with Alibaba's financial report exceeding expectations driving the technology sector up in the second half of the week. The revaluation of Chinese assets may further expand: First, positive factors such as industry, real estate, and the private sector business environment continue to emerge, with Alibaba's financial report exceeding expectations expected to boost AI theme investment towards industry-specific investments; Second, global funds are rebalancing between Chinese and American equity assets. Currently, the participation level of active allocation foreign capital in this round of the market is still not high, and if long-term foreign capital flows back in the future, industries and assets preferred by foreign capital may benefit; Third, referring to past industry cycle trends, the strengthening of industry logic or rising concentration may occur, and it may be appropriate to relax the tolerance for concentration. In terms of allocation, the electronics, media, and other sectors have high concentration levels, and the focus should continue to be on adjusting the high and low within the technology sector, with attention to sectors like pharmaceuticals and finance that benefit from AI and are currently at low levels. 3. CITIC SEC: Strengthening Industry Logic, Focus on Core Assets CITIC SEC believes that theme-based sectors that are highly dependent on fund relays have limited sustainability in the future. The market is expected to focus more on realizing clear industrial logic. The market movement since the beginning of the year, driven by the revaluation of core assets, is just the beginning. The excess turnover rate and trading volume ratios of popular themes are at historically high levels, and active fund positions have reached the highest levels in the past five years. Sectors that purely depend on fund relays are expected to have limited sustainability. From the perspective of industrial logic, large-scale deployment and application of DeepSeek, as well as Alibaba's CAPEX significantly exceeding market expectations, indicate that Chinese AI has transitioned from a thematic stage to a true industrial trend. The market is expected to focus on quality leading companies in the future. Traditional core assets such as lithium batteries and innovative drugs have a large enough imagination space, have been at low levels long enough, and have relatively thorough institutional holdings. They are also worth attention. Popular Sectors: 1. Agricultural Sector Surges The agricultural sector collectively surged, with Jiangsu Nonghua Intelligent Agriculture Technology, Thinker Agricultural Machinery hitting the limit up. DANAU, HUAXI TECHNOLOGY, Hainan Shennong Seed Industry Technology, KANGNONG SEED, Zhejiang Top Cloud-Agri Technology, ShanDongDenghai Seeds, Yuan Longping High-Tech Agriculture, and others recorded high gains. Analysis: On the news front, the Central No. 1 Document for 2025 was released on February 23, mentioning "new agricultural productivity". Dongguan Securities pointed out that the No. 1 Document anchors to promote rural revitalization and the goal of building a strong agricultural nation from various aspects, emphasizing the leadership of science and technology in developing new agricultural productivity. With valuations in the agricultural sector currently at historical lows and the push from policies, a rebound from oversold levels is expected. 2. Data Center Sector Strengthens The data center concept showed repeated strength, with power and liquid-cooled servers leading the way. Tellhow Sci-Tech hit its daily limit up for 7 days, while Weichai Heavy Machinery hit its historical high for the second consecutive time. Kehua Data Co., Ltd., Zhejiang Yinlun Machinery, and Power HF Co., Ltd. also hit their limit up. Analysis: On the news front, the successful financial report of Alibaba on the second half of the week saw a continued uptrend in the technology sector. Tellhow Sci-Tech had a strong performance, with Weichai Heavy Machinery hitting historical highs. Kehua Data Co., Ltd., Zhejiang Yinlun Machinery, and Power HF Co., Ltd. also performed well.Alibaba Group CEO Wu Yongming announced on February 24 that in the next three years, Alibaba will invest over 380 billion yuan in building cloud and AI hardware infrastructure, exceeding the total amount of the past decade. Sinolink stated that the current global AI data center scale has expanded significantly, leading to a high increase in electricity demand. Gas turbines are expected to become an important solution for power supply in the field of AI data centers in the future, with prospects for long-term demand growth.3. Siasun Robot & Automation sector hits bottom and rebounds Siasun Robot & Automation concept stocks hit bottom and rebounded, with more than 10 stocks, including Keli Sensing Technology, Thinker Agricultural Machinery, Shanghai STEP Electric Corporation, Landai Technology Group Corp., Beijing Shengtong Printing, Shenzhen Zowee Technology, reaching the daily limit up. Comment: On the news front, Lin Yi, director of the Shenzhen Artificial Intelligence Industry Office, stated at a press conference on February 23 that a special policy for humanoid Siasun Robot & Automation will be released soon, with the arrangement of artificial intelligence and Siasun Robot & Automation as part of the city's major science and technology projects. Sealand points out that under the wave of electrification and intelligence, humanoid Siasun Robot & Automation products at home and abroad continue to be iterated, and are expected to open up a market space broader than automobiles. The humanoid Siasun Robot & Automation industry chain will usher in important investment opportunities for "from 0 to 1." 4. Low-altitude economy sector on the rise Low-altitude economy concept stocks fluctuate and rise, with Zhejiang Wanfeng Auto Wheel, Jiangsu Zhongshe Group hitting the daily limit up, and Shang Gong Group, Zhejiang Jindun Fans, Nanjing Les Information Technology, Chongqing Zonsen Power Machinery, Xiangyang Changyuandonggu Industry, Citic Offshore Helicopter, Shenzhen Urban Transport Planning Center following suit. Comment: On the news front, a major project signing ceremony and on-site promotion event for the Chengdu low-altitude economy and commercial aerospace industry cluster was held recently. Zhonghang Securities pointed out that with the joint efforts of all parties, the low-altitude economy industry, as an emerging economic form, has a continuously improving industrial environment, with key points in industrial development becoming increasingly clear and progressing in an orderly manner. The direction of industrial applications is becoming clearer, with some pilot scenarios being implemented.