A-shares midday review | The Sci-tech Innovation 50 Index rises more than 2%, reaching a historical high! Global technology stocks are under pressure, how long can A-shares remain "self-sufficient"?

On May 20, the A-share market experienced a volatile adjustment in the morning session, with the three major indexes showing mixed movements. The Sci-Tech 50 Index rose more than 2%, hitting a new historical high. By midday, the Shanghai Composite Index fell by 0.45%, the Shenzhen Component Index fell by 0.37%, and the ChiNext Index rose by 0.05%. The combined turnover of the Shanghai and Shenzhen stock markets reached 1.91 trillion yuan, an increase from the previous trading day by 94.7 billion yuan. It is worth noting that against the backdrop of the collective plunge in overseas chip stocks, the domestic semiconductor chip industry chain continued to surge. Stocks related to storage chips, Changxin concept, lithography machines, advanced packaging, and others showed collective strength. Stocks like Wafer Works and Shanghai Zhangjiang Hi-Tech Park Development hit limit up, while Hua Hong Semiconductor and GigaDevice Semiconductor Inc. reached new historical highs. Analysts believe that the semiconductor industry's prosperity combined with self-controllability, and the acceleration of domestic substitution, are propelling the industry forward. Recently, Changxin Technology's performance has been outstanding, and Changjiang Storage has filed for initial public offering and listing guidance. These developments have had a significant impact on the entire semiconductor sector. It is expected that the shortage in the storage industry will continue until 2027, leading to an increase in production by domestic storage original factories, boosting equipment demand, market space, and increasing the localization rate of equipment, materials, and components. This has the potential to benefit the CBA and advanced packaging industry chains. Looking at the market, concepts related to optical modules, optical fiber cables, and composite copper foils were active in certain areas. Stocks like Shenzhen Lihexing and Suzhou Shijia Science & Technology Inc. hit limit up. Liquor stocks surged, with Jinhui Liquor hitting limit up. The photovoltaic sector briefly surged, with Inner Mongolia OJing Science & Technology also hitting limit up. The oil and gas industry chain rose, and there were also upward movements in the ChiNext board's new stocks, electronic chemicals, OLED, and battery sectors. On the downside, power stocks experienced a significant pullback, with stocks like Beijing Jingneng Power and DATANG POWER hitting limit down. AI application concepts like cultural media, AI e-commerce, and short films cooled down, with Lionhead Technology Development hitting limit down. Siasun Robot & Automation, as well as the motor sector, underwent adjustments, with 3X MOTION leading the decline. The telecom operation sector fluctuated downward, with China Telecom Corporation experiencing a drop of over 7%. The gold and non-ferrous metal sectors again showed a decline, with concepts like brain-computer interfaces, cloud computing, automotive industry chains, and commercial aerospace turning red. Looking ahead, Orient indicates that the market has started to rebound after a brief adjustment, following a weekly adjustment phase that does not hinder the prospects for further upward movement. The Shanghai Composite Index is expected to continue challenging the key level of 4200 points, with the technology track still being the mainstream choice for investment. Popular Sectors: 1. Continued surge in the semiconductor chip industry chain The semiconductor chip industry chain continued to surge, with stocks related to storage chips, Changxin concept, lithography machines, advanced packaging, and others showing collective strength. Stocks like Wafer Works and Shanghai Zhangjiang Hi-Tech Park Development hit limit up, while Hua Hong Semiconductor and GigaDevice Semiconductor Inc. reached new historical highs. Commentary: Changjiang believes that global spending on wafer factory equipment will continue to grow from 2025 to 2027. Leading domestic companies in critical equipment areas such as etching, thin film deposition, and cleaning have steadily increased their market share, while continuing to increase research and development investments. Amid the trend of localization substitution, their long-term growth prospects are clear. 2. Repeated activity in the optical fiber concept The optical fiber concept saw repeated activity, with Hangzhou Cable hitting limit up and reaching new historical highs. Commentary: According to reports, the global demand for optical fibers is increasing rapidly due to the construction of AI data centers. Orders for major Chinese optical fiber manufacturers are already scheduled until early 2027. 3. Liquor stocks surging in intraday trading Liquor stocks surged in intraday trading, with Jinhui Liquor hitting limit up; the photovoltaic sector briefly surged, with Inner Mongolia OJing Science & Technology also hitting limit up. Commentary: Maotai announced on May 16 that it would adjust the retail prices of some Maotai products in its self-operated retail system, with the price of the 53%vol 500ml Maotai liquor (premium) increasing from 2299 yuan per bottle to 2359 yuan per bottle. Institutional Views: Orient: The market has started to rebound after a brief adjustment, with no impact on the prospects for further upward movement Orient indicates that the market has started to rebound after a brief adjustment, with a weekly adjustment phase occurring, which does not hinder the prospects for further upward movement. The Shanghai Composite Index is expected to continue challenging the key level of 4200 points, with the technology track still being the mainstream choice for investment. Galaxy Securities: Green power and computing power are poised for mutually beneficial cooperation, revaluation of green power value Galaxy Securities research report suggests that the rapid growth in computing power demand is driving an increase in electricity consumption. From 2022 to 2025, China's data center electricity consumption is expected to increase from 130 billion kWh to 196 billion kWh, with its share of the total electricity consumption rising from 1.5% to 1.9%. Looking ahead, it is projected that by 2030, data center electricity consumption will exceed 700 billion kWh, accounting for over 5% of total electricity consumption. The cooperation between green power and computing power is poised for mutually beneficial growth. CITIC SEC: Token Factories and Token Operators driving the revaluation of the industry chain's value CITIC SEC's research report suggests that Token Factories are being established, and Token services are becoming standardized. The three major operators are launching Token packages, with standardized Token operations reaching a wide range of users. The establishment of Token Factories and the operation of Token operators are driving a revaluation of the industry chain's value. This shift is moving the focus of computing power leasing from a model based on fixed monthly rates to one based on actual Token usage, with leading computing power lessors gaining a competitive advantage. It is recommended to pay attention to Token Factories and related computing power leasing targets. This article was originally published on "Tencent Stock Selection," GMTEight Editor: Wang Qiujia.