A-share midday review | Index volume adjustment, ChiNext Index drops more than 1% in half a day, consumer sector rises against the trend.

On February 27, A-shares opened lower and fluctuated in the morning session. Nearly 4000 stocks were trading in the red, with a total turnover of over 1.3 trillion yuan in the first half of the day, up by 155.8 billion yuan from the previous trading day. By midday, the Shanghai Composite Index fell by 0.41%, the Shenzhen Component Index dropped by 0.76%, and the ChiNext Index declined by 1.14%. In terms of market performance, the consumer goods sector rose against the trend, with retail, duty-free, food and beverage, and tourism sectors all showing gains. Stocks like Hainan Development Holdings Nanhai surged to the daily limit. Stocks related to solid-state batteries also surged, with companies like Shandong Sacred Sun Power Sources, Shanghai Emperor of Cleaning Hi-Tech, and Sanxiang Advanced Materials all hitting the daily limit. Additionally, sectors like gaming, rare earth permanent magnets, and weight loss drugs also showed some positive performance. On the downside, the technology sector saw a decline in interest, with the computing power industry chain significantly down, and sectors like photovoltaics, consumer electronics, semiconductors, and military industries leading the losses. In terms of fund flows, major funds flowed into industries like batteries, liquor, energy metals, general retail, and leisure food, while funds flowed out of IT services, semiconductors, software development, communication equipment, and consumer electronics industries. Institutional Views: Looking ahead, Huaxi believes that both A-shares and Hong Kong stocks may face a situation where long positions and profit-taking sentiments are intertwined. The two sentiments may continue to compete for pricing power, and future trends may be dominated by fluctuations. 1. CMSC: Focus on the possibility of a decline in excess returns in the artificial intelligence sector in late March CMSC believes that in general, April is a risky time for AI-related sectors. In the past two years, the AI sector has seen a significant decline in excess returns during the earnings season, starting on April 7th in 2023 and March 22nd in 2024. Therefore, from late March onwards, it may be necessary to pay attention to the possibility of a decline in excess returns in the artificial intelligence sector. 2. Huaxi: Future trends in A-shares and Hong Kong stocks may be dominated by fluctuations Huaxi points out that A-shares and Hong Kong stocks may face a situation where long positions and profit-taking sentiments are intertwined, and the two sentiments may continue to compete for pricing power. Future trends may be dominated by fluctuations. The technology sector has shown resilience and it is advisable to maintain a bullish mindset. At the same time, the crowdedness of technology themes should also be monitored. If the overcrowding is too high and trading volume declines significantly, there may be a switching of themes and short-term cooling pressure. 3. Zhongtai: Suggest maintaining the main line of dividend assets, bonds, etc. Zhongtai believes that in the medium term, it is advisable to maintain the main line of dividend assets, bonds, etc. Technology stocks may become active repeatedly, with increased volatility. In terms of short-term pace, the positive signals from private enterprise symposiums may continue to drive strong market performance before the two sessions, with internet giants benefiting the most. With the expectations of policy announcements at the two sessions and the transfer of central government owned enterprises' equities, it is expected that sectors like central SOEs will also perform well in the near future. Popular Sectors: 1. The rise of the consumer goods sector The consumer goods sector rebounded against the trend, with retail and duty-free sectors leading the gains, with multiple stocks hitting the daily limit. Analysis: Sinolink Securities pointed out that as domestic policies to boost domestic demand and stabilize growth continue, offline consumption in China is expected to further recover in 2025. Meanwhile, several offline department stores and supermarkets have actively sought service model changes in recent times, providing new growth stimuli for traditional retail business. It is recommended to focus on the recovery of domestic consumption and high-growth tracks within the retail sector. 2. Solid-state battery sector surges The solid-state battery concept fluctuated and surged, with Shandong Sacred Sun Power Sources hitting the limit for the fifth consecutive day, and nearly ten stocks such as Shanghai Emperor of Cleaning Hi-Tech, Sanxiang Advanced Materials, and Power HF Co., Ltd. hitting the limit. Analysis: There have been continuous developments related to solid-state batteries, with Mercedes-Benz recently starting full solid-state battery road tests, and the China Solid-State Battery Technology Innovation and Industrialization Seminar scheduled to be held from March 26-28, 2025. In addition, the lithium battery industry has seen large single orders for lithium iron phosphate, with leading companies confirming price increases. CITIC SEC believes that solid-state batteries, with their excellent performance, are expected to expand the application scenarios of lithium batteries, with global shipments of solid-state batteries expected to exceed 600GWh by 2030. This article is reprinted from "Tencent Self-selected Stocks", GMTEight editor: Wang Qiujia.