A shares midday review | ChiNext Index rose 1.74% in half a day, with over 3800 stocks in the market gaining, the military sector continues to be strong.

On May 8th, the A-shares opened lower and then rose, with over 3800 stocks in the market trading in the red. The total turnover of the two markets in the first half of the day was 809.6 billion, 156.2 billion less than the previous trading day. By midday closing, the Shanghai Composite Index rose 0.38%, the Shenzhen Component Index rose 1.03%, and the Growth Enterprise Board Index rose 1.74%. Market analysis believes that three major positive news have influenced the market: 1. The "One Bank, One Bureau, One Meeting" issued a strong statement, with a package of financial policies releasing positive signals. Several public fund institutions believe that the pace of policy is faster than expected, and it is expected that there will be some policy space in the future. 2. Interest rate cuts have officially landed, with the central bank cutting the 7-day reverse repurchase rate by 10 basis points. The market generally believes that this interest rate cut policy will be beneficial in maintaining the stability of commercial bank net interest margins, and by transmitting interest rates, effectively reduce the comprehensive financing costs of the real economy and consolidate the economic fundamentals. 3. A spokesperson for the U.S. Department of Commerce said on Wednesday that the Trump administration plans to lift artificial intelligence chip restrictions from the Biden era. Boosted by this news, Nvidia, a US stock, rose over 3% overnight. On the market, the military industry sector continued to be strong, with nearly 20 stocks including Jiangxi Huawu Brake and Henan Tong-Da Cable hitting the limit up; the AI industry chain rebounded, with CPO, compressors, and AI applications, including Eoptolink Technology Inc., Xinhuanet Co., Ltd., and Visual China Group, rising or exceeding 10%; Hongmeng concept stocks performing actively, with Shanghai Wondertek Software hitting the limit up; brain-machine interface concept soaring, with Shanghai Rongtai Health Technology Corporation hitting the limit up; in addition, the photovoltaic, cross-border e-commerce, power, and ST sectors all performed well. On the downside, high-priced stocks collectively fell, with Hongbo Co., Ltd. nearing the limit down, and poor performance in agriculture, port shipping, chemicals, and civilian explosives sectors. Looking ahead, Orient points out that with the easing of previous performance and tariff disruptions, market pessimism is gradually diminishing, and the technology sector, as a long-term logic with both cyclical advantages and industrial trend catalysts, is continuously strengthening and is expected to become the main focus of future liquidity. Hot sectors 1. Brain-machine interface sector surging Brain-machine interface concept stocks surged, with Jiangsu Apon Medical Technology hitting the limit up 20%, Shanghai Rongtai Health Technology Corporation and Keeson Technology Corporation hitting the limit up, and Nanjing Panda Electronics and Beijing Chieftain Control Technology Group following suit. Comment: Guoyuan believes that China's brain-machine interface is still in the early stages of industrialization, and with strong support from the national and local governments, the brain-machine interface industry has achieved many results in terms of market size, number of companies, and technological innovation. It is recommended to pay attention to investment opportunities related to the industry chain companies in the future. 2. CPO concept rising CPO concept stocks fluctuated and rose, with Eoptolink Technology Inc. rising more than 8%, and Zhongji Innolight, Zhejiang Zhaolong Interconnect Technology, Suzhou TFC Optical Communication, Yangtze Optical Fibre And Cable Joint Stock, and T&S Communications following suit. Comment: In terms of news, a spokesperson for the U.S. Department of Commerce said on Wednesday that President Trump plans to lift restrictions on the export of advanced artificial intelligence (AI) chips from the Biden era. 3. Military industry sector continues to be strong The military industry sector continued to be strong, with Jiangxi Huawu Brake, Beijing Aerospace Changfeng, Chengdu Leejun Industrial, and Sichuan Chengfei Integration Technology Corp. Ltd. rising for two consecutive days, and Avic Chengdu Aircraft, EMTEK (Shenzhen) Co., and Chengdu RML Technology following suit. Comment: Huatai points out that some targets in the military industry upstream informationization, new materials, and other upstream areas have shown clear signs of improvement in demand, orders, and even performance, indicating that the fundamentals of the military industry sector have entered a rebound phase. Institutional views 1. Zhongtai: A-shares will continue to demonstrate independence and resilience Zhongtai points out that policy intensity, high-level attitude, and the continued increase in trading volume are the sources of confidence, and they are relatively optimistic about May, although fluctuations in the index are inevitable, sector and individual stock opportunities still exist, and A-shares will continue to demonstrate the characteristics of independence and resilience. The major trend is irreversible, and assets such as gold and A-shares should be considered as opportunities to buy on dips. The opportunities in May will be more reflected in technology, consumption, and some cyclical sectors. It is recommended to focus on: first, the technology sector with significant improvement in performance and policy guidance in both directions, mainly in TMT; second, some sectors with potential opportunities driven by the continuous warming of domestic consumption expectations; and third, the power sector with a cyclical dividend under a bottom-line mindset. 2. Sinolink: Market "volatility" may trend higher Sinolink points out that at the current pricing level of the A-share market, it maintains the view that market "volatility" may trend higher, and the small and medium-cap growth style will "switch" to large-cap value defense, continuing the cycle for at least a quarter, until signs of a "profit low" appear; considering that the A-share "market bottom" has appeared +AI.Industrial logic catalyzes, it is expected that technological growth still retains some structural opportunities. Industry allocation in May shows clear differentiation in growth, with value gradually taking the advantage.Orient: Market pessimism gradually subsides Orient points out that due to ongoing external negative factors, the market's response to the domestic stimulus monetary policy is somewhat subdued. However, as the policy effects gradually become apparent in the future, the support for the market will become more and more evident, and the market will continue to operate in a "slow bull" manner. Overall, as the disturbance caused by previous performance and tariffs eases, the market's pessimism is gradually dissipating. The technology sector, with both cyclical advantages and long-term industry trend catalysis, continues to strengthen its logic and is expected to become the main focus of later-stage funds. This article was reprinted from "Tencent Stock Selection", edited by GMTEight: Wang Qiujia.