A-share midday review | Indexes surge in high volume, Shanghai Composite regains 3900 points AI mobile phone stocks soar, ZTE Corporation hits limit-up.

In the early morning trading session, the three major indexes of the A-share market shook and rose, with increased trading volume. By the noon close, the Shanghai Composite Index rose by 0.42%, the Shenzhen Component Index rose by 0.95%, and the Growth Enterprise Market Index rose by 0.9%. The Shanghai Composite Index returned above 3900 points. In terms of the market, the consumer electronics sector collectively surged, with AI smartphone companies experiencing significant gains, including ZTE Corporation, Telling Telecommunication Holding, Daoming Optics&Chemical, and more than 10 other stocks hitting the limit up. The non-ferrous metals and precious metals sectors continued to strengthen, with Baiyin Nonferrous Group hitting the limit up and Jiangxi Copper briefly hitting the limit up. The commercial aerospace sector remained strong, with Addsino Co., Ltd., Hunan Aerospace Huanyu Communication Technology hitting the limit up or rising more than 10%. The film and television sector was active at the opening, with China Film Group hitting the limit up. Banking stocks were volatile and strong, with Jiangsu Zhangjiagang Rural Commercial Bank rising more than 5%. The lithium battery industry chain was also active, with JinFu Technology and Canmax Technologies hitting the limit up or rising more than 10%. In addition, rare earths, light modules, PCBs, and other sectors also showed some performance. On the downside, the titanium dioxide sector fluctuated downward, with Anhui Annada Titanium Industry falling by more than 4%; some consumer stocks faced adjustments; the photovoltaic sector had a weaker performance, with CSI Solar Co., Ltd. falling by over 7%. In terms of individual stocks, ZTE Corporation continued to strengthen, hitting the limit up with a turnover exceeding 13.1 billion yuan. It was reported that the AI smartphone developed by ByteDance and ZTE Corporation is set to be released in early December. ByteDance is responsible for the implantation of the bean bag large model and the definition of AI interaction functions, while ZTE is responsible for hardware definition, product design, and manufacturing. Looking ahead, CITIC SEC believes that the market is showing characteristics of a slow bull market with low volatility. It suggests that major changes in domestic demand are needed to open up the market to a higher level. Before unexpected changes occur, it recommends continuing to reevaluate pricing power in resource/traditional manufacturing industries and companies going global. Hot sectors: 1. AI smartphone concept surges Consumer electronics were strong, and the AI smartphone sector surged, with ZTE Corporation, Telling Telecommunication Holding, Daoming Optics&Chemical, and many other stocks hitting the limit up. Comment: According to news reports, the bean bag released a preview of its mobile assistant technology, which can be experienced on the engineering prototype nubia M153. The bean bag stated that this is a product that needs to be completed in collaboration with mobile phone manufacturers. The bean bag is currently in talks with multiple mobile phone manufacturers for assistance cooperation and does not have plans to develop its own phone. More progress is expected to be announced in the future. 2. Film and television sector strengthens The film and television sector was strong, with China Film Group hitting the limit up for two consecutive days, and Shanghai Film, Omnijoi Media Corporation, Hengdian Entertainment, Alpha Group, Bona Film Group leading the gains. Comment: On November 30th, the single-day box office of "Zootopia 2" exceeded 700 million, surpassing "Avengers 4: The Endgame" to become the single-day box office champion in the history of imported films in mainland China and also the non-Spring Festival file Box office champion for the day. 3. Metal sector leads gains The precious metals sector rose, with Baiyin Nonferrous Group hitting the limit up, and companies like Inner Mongolia Xingye Silver&Tin Mining, Hunan Silver, Henan Yuguang Gold & Lead, Shengda Resources following suit. Comment: Silver prices surged on November 28th, with both domestic and international silver prices hitting historical highs. COMEX silver futures reached a high of $57.245 per ounce, London spot silver hit a high of $56.78 per ounce, and domestic Shanghai silver futures main contract rose to 13239 yuan per kilogram. As of now, its cumulative increase for the year has reached 90%, making it one of the strongest performing commodities of the year. 4. Commercial aerospace remains active Stocks in the commercial aerospace sector were active, with Xiamen Changelight reaching new highs, and Beijing LeiKe Defense Technology, Shanghai Shunho New Materials Technology, and others following suit. Comment: Recently, the National Space Administration has established a commercial aerospace department, and related businesses are gradually being carried out, marking the establishment of a dedicated regulatory agency for China's commercial aerospace industry. China Galaxy Securities believes that the commercial satellite industry is entering a new stage of dual-drive traction from the demand side and support from the supply side, with the industry ecosystem expected to take shape. Institutional view: 1. CITIC SEC: The market shows characteristics of a slow bull market, significant changes in domestic demand are needed CITIC SEC believes that the market is showing characteristics of a slow bull market, with the volatility of the main broad market decreasing, and retracements and Sharpe ratios better than in the past. However, the subjective improvement in the sense of the bulls is relatively limited, still underperforming quantitative strategies since the beginning of the year, slightly outperforming the WIND A-share, while the timing effect is significantly weakened. Breaking the deadlock can only come from major fundamental changes beyond expectations. This year was about external demand and going global, but in the future, significant changes in domestic demand are needed to open up the market to a higher level. Before unexpected changes occur, it is recommended to continue reevaluating pricing power in resource/traditional manufacturing industries and companies going global. 2. China Securities Co., Ltd.: Seize the opportunity, prepare for the year-end rally China Securities Co., Ltd. believes that although the market may still experience short-term volatility, any decline would present a better opportunity for positioning. In the short term, the main strategy is to seize opportunities and prepare for the year-end rally. Focus on the Federal Reserve's interest rate meeting after December 10 and the Central Economic Work Conference, consider adding positions before the meetings start, pay attention to the support of the half-year line and market volume. The main reasons for the year-end rally are: early speculation under consensus stimulated by the spring boom, the confirmation signal that the Federal Reserve may cut interest rates in hawkish manner, the anticipation of policies in the first year of the "Fifteen-Five" plan, and the similarity to the year-end rally in December 2020. Taking into account the industry trends for 2026, AI (CPO, AI applications, liquid cooling), new energy (energy storage, solid-state batteries, nuclear power), innovative drugs, mechanical equipment (human-like Siasun Robot&Automation, automation equipment), non-ferrous metals, and chemicals are expected to be the main upward directions for the year-end rally. Also, opportunities in the Hong Kong Internet and commercial aerospace sectors are worth monitoring. Key industries to focus on: non-ferrous metals (copper, silver), AI (communication, computer), new energy, innovative drugs, mechanical equipment, Hong Kong Internet, chemicals, etc. Key themes to focus on: commercial aerospace. 3. Huaan: Continued volatility, waiting for a new opportunity The tone of the Central Economic Work Conference is expected to roughly meet expectations, the Federal Reserve's hawkish interest rate cut is expected, and the micro-liquidity may retract marginally, with continued economic slowdown and the market remaining at a high level of volatility. In terms of positioning, sector rotation may accelerate, making it more challenging to grasp opportunities, so preparing for the next phase of the market could be a better choice. The core position of the AI industry chain remains unchanged, with recent adjustments providing a good opportunity for positioning. Additionally, areas with improved supply and demand as well as economic growth are also worth considering, including storage and energy storage sectors. Looking forward to December, we expect high volatility to continue, with a lack of important events to lead risk appetite higher. The market may continue to wait for a new opportunity while remaining at a high level of volatility. In terms of positioning, sectors that have experienced significant gains in the past may continue to consolidate, with rapid sector rotation remaining the main trend, but becoming more challenging to predict. Therefore, in this context, downplaying rotation and strengthening patience may be a better approach for future positioning. Specific areas to focus on include the clear trend in the AI industry, with short-term adjustment pressure providing a good opportunity for the next phase of the market. This remains the most core theme of this round. In addition, areas of improvement in supply and demand and economic growth are also worth paying attention to. Overall, it is recommended to focus on the AI industry chain and areas of improving economic conditions. This article is reproduced from "Tencent Stock Selection". GMTEight Editor: Wang Qiujia.