A-share midday review | ChiNext Index rose more than 2% in half a day, with more than 4,000 stocks trading in the market, and solid-state battery concept stocks surged.

On March 3, the A-share market opened with a rebound after fluctuating in the morning. Over 4000 stocks were in the green. By the close, the Shanghai Composite Index rose by 0.34%, the Shenzhen Component Index rose by 1.08%, and the ChiNext Index rose by 2.12%. In terms of the market, the new energy sectors such as solid-state batteries, photovoltaics, and wind power led the gains. Power HF Co., Ltd. saw a seven-day consecutive increase, while stocks like Shanghai Emperor of Cleaning Hi-Tech and Guangdong Orient Zirconic ind sci & tech hit their daily limit up. Real estate stocks also experienced gains, with Beijing Capital Development hitting its daily limit up. The explosives sector saw a boost, with stocks like Poly Union Chemical Holding Group and Shenzhen King Explorer Science And Technology Corporation hitting their daily limit up. The AI medical concept was once again active, with stocks like Berry Genomics and Thalys Medical Technology Group Corporation hitting their daily limit up. The automotive sector also performed well, with Zotye Automobile hitting its daily limit up. On the downside, sectors like beverage manufacturing, banking, and airport transportation were in the red. In terms of individual stocks, the stock price of Orient Group Incorporation hit its daily limit down, with a trading volume exceeding 1.4 billion yuan. It was revealed that the China Securities Regulatory Commission initiated an investigation into Orient Group Incorporation on June 20, 2024. It was preliminarily found that the financial information disclosed by Orient Group Incorporation from 2020 to 2023 was significantly false, suspected of major financial fraud, and could potentially involve significant illegal delisting. The case is currently under investigation, and the CSRC will promptly determine the facts of the violation and deal with it seriously according to law. In terms of fund flows, main funds flowed into industries such as batteries, energy metals, photovoltaic equipment, engineering machinery, and agricultural chemicals, while funds flowed out of sectors such as semiconductors, communication equipment, computer equipment, securities, and IT services. Institutional views Looking ahead, Guotai Junan believes that the current market should not simply be understood as a decrease in "value for money". They predict that the tech index will not hit a new low and will see a new high by the end of the year. 1. Guotai Junan: The tech index will not hit a new low Guotai Junan believes that the current market should not simply be understood as a decrease in "value for money". The market's previous rise incorporated many optimistic expectations and overheated trading, and as uncertainties increase in the next stage (such as US-China friction and profit growth), policy adjustments will temporarily be difficult to make quickly, leading to a decrease in investor risk appetite. Guotai Junan predicts that the market will continue to fluctuate. China's subjective investment will return in 2025, but it is important to differentiate the main battlegrounds, with the tech index not expected to hit a new low and seeing a new high for the year. However, while tech growth will be the main focus for the year, it is recommended to "sell high and buy low" during the short term, as risk preferences are expected to decrease in the next phase. 2. Galaxy Securities: A-share market presents an opportunity for structural valuation reshaping Galaxy Securities believes that the convening of the National People's Congress and the Chinese People's Political Consultative Conference will provide further guidance for the investment structure of the A-share market. With the Chinese economy transitioning between new and old growth engines, especially with the rapid development of new quality productive forces and a series of policy boosts, there is an opportunity for structural valuation reshaping in the A-share market. Currently, the overall A-share index PE ratio is at a historical median level, but still relatively low compared to overseas markets. As long-term funds accelerate their entry into the market, investor confidence will strengthen. It is still necessary to pay attention to the impact of Trump's China policy and the disturbance of the pace of domestic economic fundamentals repair. 3. GF SEC: The main style of tech investment is not expected to change significantly GF SEC believes that the progress of industries such as DeepSeek and domestic Siasun Robot&Automation is bringing related sector stocks closer to cyclical investments rather than thematic investments over the past two years, with the possibility of more and more specific sub-sectors appearing, similar to the previous light module sector. Accordingly, each high crowding formed pullback could be an opportunity for reconfiguration. It is expected that the main style of tech investment will not change significantly. Attention should be paid to AI applications benefiting from decreasing inference costs, all-in-one machines, and localized deployment; in Siasun Robot&Automation, sub-industries such as tendons and electronic skins should be focused on; low-growth concerns should focus on military electronics; thematic investments should focus on cultural export and low-altitude economy. Popular sectors 1. Solid-state battery concept strong The solid-state battery concept continued to rise, with WUHAN LAND rising by 30%, and Shanghai Emperor of Cleaning Hi-Tech, Guangdong Orient Zirconic ind sci & tech, Sanxiang Advanced Materials, Delixi New Energy Technology, etc. hitting their daily limit up. Stocks like LWGF, Fuxin Dare Automotive Parts, NAKNOR, Hunan Zhongke Electric, CHANGHONG ENERGY, and many others rose by over 10%. Review: According to a research report from CITIC SEC, considering the important catalysts for the solid-state battery industry in 2025, it is an important year for mature products of semi-solid-state batteries to be launched gradually and full solid-state technology routes to become clearer and converge. It is recommended to seize investment opportunities related to the industrial chain, including batteries, materials, equipment, and resources. 2. Explosives sector rally The explosives sector saw a shake-up rally, with Poly Union Chemical Holding GrouShenzhen King Explorer Science And Technology Corporation hit the daily limit up, with Tibet GaoZheng Explosive, Xinjiang Xuefeng Sci-Tech, Sichuan Yahua Industrial Group, and Shanxi Tond Chemical leading the gains.Review: On February 28th, the Ministry of Industry and Information Technology issued the "Implementation Opinions on Accelerating the Transformation and Upgrading of the Civil Explosive Materials Industry" to promote enterprise restructuring and integration. Huajin Securities stated that downstream demand for civil explosives comes from resource development, infrastructure construction, and the construction industry. The supply side of the civil explosives industry is tightly regulated, with policy promotion concentrating, and the structure and pattern continuously optimized, benefiting from the increasing capital expenditure in mining and the continued strength in infrastructure development. 3. Real estate stocks rise Real estate stocks fluctuated and rose, with Beijing Capital Development hitting the limit up, 5i5j Holding Group, Gemdale Corporation, and Zhongtian Service rising by over 5%. Zhuhai Huafa Properties, Hefei Urban Construction Development, Hangzhou Binjiang Real Estate Group, Shenzhen SDG Service, Tianjin Jintou State-owned Urban Development, and others followed the uptrend. Review: On the news front, the latest "Top 100 Chinese Real Estate Companies Sales Performance Rankings for January-February 2025" released by the China Real Estate Research Institute showed that the year-on-year decline in sales for the TOP 100 real estate companies narrowed by 10.6 percentage points in January-February, with a 17.3% year-on-year growth in sales in February, with 12 companies achieving sales of over 100 billion. This article is reprinted from "Tencent Stock Selections", edited by GMTEight: Wang Qiujia.