A-share midday review | "Earnings kills" and "style change" double blow, three major indexes collectively "eat dirt"! Banking stocks bucked the trend and supported the market.

On April 21st, the three major indexes of A-shares were weak and fluctuated, with the ChiNext Index and the Shenzhen Component Index both dropping more than 1% during the day, while bank stocks rose to support the market. By the midday closing, the Shanghai Composite Index fell by 0.24%, the Shenzhen Component Index fell by 0.75%, and the ChiNext Index fell by 0.94%. The turnover of the Shanghai and Shenzhen stock markets reached 1.57 trillion yuan in the first half of the day, a decrease of 134.3 billion yuan from the previous trading day. According to a review of publicly available market information, the current situation in the A-share market, where "indexes are weak and individual stocks are bleak," is a result of a combination of internal and external factors leading to a decline in sentiment. Firstly, external sentiment is suppressing the market. The Nasdaq ended its 13-day winning streak, and uncertainties related to the Middle East situation (expiration of the US-Iran ceasefire agreement) have increased, leading to a decline in global risk appetite. Secondly, the "earnings season" is causing concerns. Late April is a period of intense disclosure of annual and first-quarter reports, causing investors to worry about performance "landmines" and leading them to actively exit stocks with high valuations or uncertain performance. One example is the tech "star stock" Shenzhen Envicool Technology, which reported a significant decline in performance, with its stock price hitting the limit down today, dampening the tech sector's upward momentum and causing a shift in market focus towards defensive sectors like lithium batteries and energy metals. Thirdly, there is a double pressure on the technical front. After opening lower, the indexes weakly fluctuated without strong upward momentum. The Shanghai Composite Index faces pressure at the 4080-4100 points integer mark, with previous trapped long positions and recent profit-taking adding to the double selling pressure. In terms of market performance, the aerospace industry concept remained strong, with Shanghai Shunho New Materials Technology and ARTS Group Co., Ltd hitting limit up; the lithium battery industry chain showed strength against the trend, with lithium mines and solid-state batteries performing well, Shenzhen Wongtee International Enterprise hitting limit up and Jinzhou Yongshan Lithium rising more than 5%; bank stocks rose against the trend, with CITIC BANK and BQD rising by more than 2%; semiconductor materials and equipment and photolithography continued to rise, with Guangdong Huate Gas Co. hitting limit up; the pharmaceutical sector was active against the trend, with Guizhou Yibai Pharmaceutical hitting limit up; the gaming and media concept rose, with Beijing Jingxi Culture & Tourism and Cultural Investment Holdings hitting limit up; the clean energy concept rebounded, with Guangdong Electric Power Development hitting limit up. In addition, sectors like rare earths, coal, and aquaculture also showed some performance. On the downside, the computing power industry chain collectively adjusted, with the computing power leasing sector initially faltering, ZJBC Information Technology and Nanjing Canatal Data-Centre Environmental Tech falling by more than 8%; liquid cooling concept stocks saw a pullback, with Shenzhen Envicool Technology, Shandong Sacred Sun Power Sources hitting limit down, and Hangzhou Zhongtai Cryogenic Technology Corporation falling by more than 10%; the power and grid equipment concept weakened, with Hexing Electrical falling by over 7%; chip stocks fluctuated lower, with several stocks like Verisilicon Microelectronics (Shanghai) Co., Ltd. and Wingtech Technology falling by more than 5%; brokerage stocks traded lower, with Guosheng touching limit down. In addition, sectors such as tourism hotels, wind power equipment, and consumer electronics showed weaker trends. Looking ahead, China Securities Co., Ltd. stated that the ChiNext Index is still the most cost-effective direction in the A-share market currently, and recommended exploring high-performance sectors in the first quarter for industrial layout. Key Sectors 1. Bank stocks rose against the trend Bank stocks rose against the trend, with Bank Of Nanjing, CITIC BANK, and BQD rising by more than 2%. Review: Since 2026, several listed banks have successively disclosed progress in shareholder and senior management increases, covering state-owned large banks, joint-stock banks, city commercial banks, and rural commercial banks, which have become an important market signal for the banking sector this year, attracting widespread attention to bank valuation levels and operating fundamentals. 2. The lithium battery industry chain rose against the trend The lithium battery industry chain rose against the trend, with performances in lithium mines and solid-state batteries, Shenzhen Wongtee International Enterprise hitting limit up, and Jinzhou Yongshan Lithium rising by more than 5%. Review: According to a research report from a securities firm, the industrialization of the sodium + solid-state system is approaching, and there are opportunities for material + equipment end increments. Regarding solid-state batteries, the diversification trend of downstream applications in the lithium battery industry requires an acceleration of the industrialization pace of solid-state batteries, with a clear industrialization trend. 3. The aerospace industry concept continued to be strong The aerospace industry concept continued to be strong, with ARTS Group Co., Ltd hitting its second consecutive limit up, Shanghai Shunho New Materials Technology hitting a T-shaped limit up, and Anhui Shenjian New Materials reaching limit up to create a new historical high. Review: On April 20th, the domestic space computing power company Beijing Orbital Divinia Technology Co., Ltd. announced on its official WeChat account that it had recently completed a PreA1 round of equity financing; the company also made significant progress in debt financing, signing strategic credit agreements or obtaining credit intent letters from several banks, with a total financing amount of 57.7 billion yuan. Institutional Views China Securities Co., Ltd.: The ChiNext Index is still the most cost-effective direction in the A-share market Currently, the core focus of A-shares is on the ChiNext Index. Last week, the ChiNext Index surpassed the previous bull market high, but there is a difference of opinion among investors on whether there is still significant upside potential for the ChiNext Index. Taking into account factors such as the rising potential of weighty stocks in the computing power and new energy sectors, the low valuation of the ChiNext Index, etc., we believe that the ChiNext Index is still the most cost-effective direction in the A-share market at present. Regarding industrial layout, we recommend exploring high-performance sectors in the first quarter, focusing on sectors such as new energy, energy storage, lithium battery materials, AI computing power, innovative medicine, semiconductors, and consumption. Huatai: Marginal improvement in volume and price, pay attention to real estate stock opportunities According to a Huatai research report, March's real estate data showed a marginal improvement in sales volume and price, with house prices entering a positive turning process, especially in first-tier cities where a price rebound indicates a gradual restoration of market confidence. Huatai believes that although investment is still at a low point, the spontaneous recovery of the market has increased the sustainability of the improvement in house prices, which may also bring opportunities for real estate stocks. Key recommendations include companies with lighter historical burdens or healthier cash flows preparing for a new round of expansion; companies with low valuations and sufficient impairment provisions; companies with a presence in regions where the primary turning is positive; and companies in stock trading and the rear-end of the real estate chain. Huaxi: Overseas high-end computing power resources remain scarce, manufacturing, storage, and performance signals together verify the continuation of prosperity Google will hold the Google Cloud Next'26 conference. Sina Finance mentioned that the conference will be held from April 22nd to 24th, focusing on cloud computing and AI computing power, with expectations of releasing a new generation of TPU architecture, and disclosing progress in technological applications such as memory pooling and optical cross-connect switches (OCS). If the conference emphasizes TPU, memory pooling, and optical interconnection like in the past, the attention of the overseas computing power industry chain will further expand from a single GPU resource shortage to more fundamental aspects such as cloud providers' self-developed chips, cluster interconnection, and data center network architecture upgrades. These signals mutually corroborate each other, indicating that the support for the current computing power prosperity is not just event catalysis but simultaneous reinforcement in terms of pricing, manufacturing, storage, and performance realization. This article is reproduced from "Tencent My Stocks". GMTEight Editor: Wang Qiujia.