A-share closing review | Shanghai index closed up 0.64%, new trend ignited! Micro LED exploded

The National Two Sessions convened, combined with the strong performance of the peripheral market, boosted market sentiment, and today the market made a strong comeback. The Sci-Tech Innovation Board and the Growth Enterprise Market led the gains, with funds focusing on chip and other technology growth sectors. The market traded at 2.3 trillion yuan throughout the day, essentially flat compared to the previous trading day, with over 4000 stocks in both markets rising. On the stock side, the chip sector was strong, with stocks like C*Core Technology and Biwin Storage Technology leading the gains. According to South Korean media reports, in the first quarter, Samsung Electronics' DRAM prices have increased by 100% from the initial 70%. It is estimated that SK Hynix and Micron Technology will also see similar price increases. Market analysts pointed out that the continuous sharp increase in DRAM prices is a positive development for the storage chip sector. The Micro LED concept exploded, with stocks like BOE HC SemiTek Corporation, Shenzhen Jufei Optoelectronics, and Shenzhen Liantronics all hitting the 20% limit up. According to the latest survey from TrendForce, with the rise of generative AI, the demand for high-speed transmission in data centers continues to increase. The unit transmission energy consumption of the Micro LED CPO solution is low, which can significantly reduce overall energy consumption to 5% of the copper cable solution, making it a potential energy-saving alternative for optical interconnection. In other hot spots, the electric grid equipment concept continued to be strong, with China XD Electric hitting a historical high limit up; the computing power leasing concept rapidly rose, with Mcc Meili Cloud Computing Industry Investment and Beijing Topnew Info&Tech both hitting the limit up. On the downside, the seed industry sector saw a significant adjustment, with stocks like QIULE SEEDS, KANGNONG SEED, and Hainan Shennong Seed Industry Technology falling by over 10%. Oil and gas stocks surged in the afternoon but then fell back, with Shuifa Gas Co., Ltd. and Shanxi Blue Flame Holding hitting the limit down. Looking ahead, Guotai Haitong stated that stability is the cornerstone of China's economy and stock market today, and they advocate for a proactive contrarian layout. Founder recommended focusing on three main themes: the diffusion and deepening of technology growth assets, focusing on the sub-sectors of hard technology and AI application; increasing allocations to industries benefiting from the "anti-internal competition" policy such as energy, chemicals, and building materials; and paying attention to the recovery opportunities of undervalued, low-institutional-holdings, and fundamentally stable sectors. In terms of individual stocks, 4079 stocks rose in both markets, while 1306 stocks fell, and 102 stocks remained flat. There were 79 stocks hitting the limit up and 7 stocks hitting the limit down. At the close, the Shanghai Composite Index rose by 0.64% to 4108.57 points, with a turnover of 106.81 billion yuan; the Shenzhen Component Index rose by 1.23% to 14088.84 points, with a turnover of 132.20 billion yuan. The ChiNext Index rose by 1.66% to 3216.94 points. Funds Movement Today, the main funds focused on communication equipment, semiconductors, optical and optoelectronic sectors, with stocks like Eoptolink Technology Inc., Shanghai Electric Group, and Shanghai Stonehill Technology among the top inflows for the main funds. Key News Review 1. Draft outline of the "Fourteenth Five-Year Plan" proposes to promote high-quality development of the real estate sector The draft outline of the "Fourteenth Five-Year Plan" proposes to promote the high-quality development of the real estate sector. The plan aims to accelerate the construction of a new mode of real estate development, improve the multi-subject supply, multi-channel guarantee, and rental-purchase dual housing system, and achieve a higher level of housing availability. Enhance the housing security system and promote the stable and healthy development of the real estate market. 2. Minister of Industry and Information Technology, Li Lecheng: Fully promote the development and iterative updating of new generation AI products On March 5th, at the first session of the "Minister Channel" of the Fourteenth National People's Congress, Minister of Industry and Information Technology, Li Lecheng, stated that efforts should be made to fully promote the development and iterative updating of new generation AI products, including brain-computer interfaces, autonomous driving cars, and Siasun Robot&Automation, to advance scientific and technological research and technical iterations. Strongly support the development of intelligent agricultural machinery and medical equipment, enabling more intelligent products to meet the needs of various sectors. 3. Government Work Report: Further improve the medium and long-term capital market entry mechanism and expand the exit channels for private equity and venture capital funds The Government Work Report proposes to continue deepening reforms in key areas. Focusing on building a high-level socialist market economy system, strengthening reform efforts, deeply removing institutional barriers, and enhancing the momentum and vitality of high-quality development. Promote financial and tax system reforms, increase the coordination of fiscal resources and budgeting efforts, raise the proportion of state capital income receipts. Strengthen financial management, deepen zero-based budgeting reforms, expand the scope of central department pilot projects. Improve the local tax system and expand local tax sources. Adjust and optimize the scope and rates of consumption taxes, and advance the shifting of tax levies on some items to later stages. Regulate the competitive order of financial institutions, further reduce the quantity and improve the quality of local small and medium financial institutions. Continuously deepen comprehensive reforms in capital market investment and financing, further improve the medium and long-term capital market entry mechanism, enhance investor protection mechanisms, expand the exit channels for private equity and venture capital funds, increase the proportion of direct financing and equity financing. Market Judgement for the Future 1. Guotai Haitong: Stability is the cornerstone of China's economy and stock market today Guotai Haitong stated that the turmoil in the Middle East challenges investors' expectations of investing in China regarding war speculation, resource competition, and security issues of shipping routes. During periods of weak confidence, China's market performance in the face of geopolitical impacts has often been poor. However, they believe that stability is the cornerstone of China's economy and stock market today, and advocate for a proactive contrarian layout. 2. Founder: The market will gradually shift to "performance validation", recommends focusing on three main themes According to the Founder research report, the current spring market in A-shares has entered the second half, and the market will gradually shift to "performance validation." They recommend focusing on three main themes: the diffusion and deepening of technology growth assets, focusing on the sub-sectors of hard technology and AI application; increasing allocations to industries benefiting from the "anti-internal competition" policy such as energy, chemicals, and building materials; and paying attention to the recovery opportunities of undervalued, low-institutional-holdings, and fundamentally stable sectors. 3. Guotai Securities: "New and old dance together" remains the most important structural configuration theme The so-called "HALO" trading in A-shares has reached a historical high, but the more practical and rational interpretation behind it is not from the creative destruction of AI technology, but from the impact of rising prices. It comes from the stabilization and rebound of the Producer Price Index (PPI), which constrains the differentiation between technology/cyclical sectors, giving more excess return space to current price-increasing varieties. This means that by looking towards 2026, a "rebalancing" must be undertaken, as continuing the practice of leaning towards technology in 2025 is untimely, and the role of portfolio management becomes more prominent. Furthermore, as the stabilization and rebound of PPI mainly come from the rise in global-priced resources driven by geopolitical factors and a weak dollar, lacking continuous support from domestic and international economic fundamentals, prices reside at a high level where there is inherent high volatility, making it difficult for cyclical sectors to gain a dominant advantage over technology. Therefore, "new and old dance together" will remain the most important structural configuration theme. This article was reprinted from "Tencent Self-selected Stocks". Editor: Liu Jiayin.