A-share midday review | ChiNext 50 hits a new high before falling! Two unexpected events in A-share market, will the market style change?

On May 21st, the three major A-share indexes rose in the morning and then fell back. The Sci-Tech 50 Index turned downwards, rising over 2% at one point to set a new historical high. By midday, the Shanghai Composite Index was flat, the Shenzhen Component Index rose by 0.59%, and the ChiNext Index rose by 0.52%. The total trading volume of the Shanghai and Shenzhen markets in the first half of the day was 2.1 trillion yuan, an increase of 194.6 billion yuan compared to the previous trading day. Of note, there were two surprises in the morning session of the A-share market: One was the unexpected outburst of brokerage stocks, with Huaan hitting the limit up within 5 minutes of trading, causing the securities industry index to rise by over 3% in the morning. The second surprise was that after the surge in brokerage stocks, the growth stock sector did not collapse as usual. Hot sectors like semiconductors still showed good gains. Apart from a few large-cap stocks, most of the market performance was positive. Recently, the market has given investors the feeling that if they are not in the "light", they are just "standing in the light". If you haven't bought the right stocks or sectors, it's hard to be comfortable. Today, the surge in brokerage stocks was at one point interpreted by the market as a signal of a change in style. So, will the market style change? Analysts believe that as long as the technology sector internationally remains strong, the style of the A-share market may continue for some time. Last night, the semiconductor sector in the US once again surged, with the Philadelphia Semiconductor Index climbing by 4.49%. Today, the South Korean stock market surged by nearly 7%, and this market's movements are largely influenced by the semiconductor sector. In terms of the market, technology stocks collectively rebounded, with glass substrate, optical optoelectronics, and optical module concepts leading the market. Boe Technology Group, Caihong Display Devices, and others hit the limit up. The commercial aerospace sector fluctuated and rose, with shares like Cheng Chang Technology and FIYTA Precision Technology hitting the limit up. The semiconductor industry chain rose and then fell, with Shanghai Shengjian Technology hitting the limit up. The big finance sector rose, with internet finance and brokerage sectors leading the way, and shares like Shanghai DZH Limited hitting the limit up. The automotive industry chain performed well, with the autonomous driving concept strengthening, leading to shares like Dazhong Transportation(Group)Co.,Ltd. and Zhejiang Shibao hitting the limit up. Siasun Robot&Automation and the electric motor sector were active, with shares like Estun Automation hitting the limit up. The computing power sector and Nvidia concept saw gains in intraday trading, with shares like Beijing ZZNode Technologies hitting the limit up. Small metals, consumer electronics, flying cars, port shipping, and consumer goods sectors also saw gains. On the downside, the oil and gas industry chain and coal stocks saw declines. The 6G and communication equipment sectors moved lower, with shares like Jiangsu Cai Qin Technology falling by over 10%. The power sector continued to adjust, with East Group Co., Ltd. leading the losses. Fluorine chemical concepts fluctuated downward, with Guangdong Huate Gas Co., Ltd. leading the declines. Wind power equipment, photovoltaics, chemical fibers, computing power leasing, and real estate sectors all weakened. Looking ahead, China Securities Co., Ltd. believes that the current market differentiation is superficial, while the change in style is essential. The medium-term rebound trend remains unchanged, with consolidation indicating a build-up of strength. Future funds are likely to continue focusing on the semiconductor and AI sectors, while high-growth themes may experience adjustment pressures. Popular Sectors: 1. The big finance sector saw gains The big finance sector rose, with internet finance and brokerage sectors leading the way, and Shanghai DZH Limited hitting the limit up. Analysis: Galaxy Securities research report stated that at the current point in time, the financial sector is at a relatively low valuation, with low allocation of funds and weak trading volume. While there is sufficient safety margin, there is a lack of short-term explosive power. Positive catalysts coexist with potential risks. 2. Active non-ferrous metal sector The non-ferrous metal sector was active, with Ningxia Orient Tantalum Industry hitting the limit up, and Yunnan Tin Co., Ltd., Hootech Inc., Yunnan Tin Co., Ltd., Guangdong Orient Zirconic Ind Sci & Tech following suit. Analysis: On the news front, London zinc rose by over 6% intra-day, reaching $54,600 per ton. Recently, a new Ebola outbreak in the Democratic Republic of Congo spread to North Kivu Province (where the Bisie mine is located), prompting Rwanda to temporarily close its border ports with Goma. Also, spot gold rose to $4,560 per ounce, up 0.38% intraday. 3. Continued strength in the semiconductor equipment sector The semiconductor equipment sector continued to show strength, with Shanghai Shengjian Technology hitting consecutive limit ups and NAURA Technology Group hitting the limit up to set a new historical high. Analysis: Changjiang believes that global wafer fab equipment spending will continue to grow from 2025 to 2027. Leading domestic companies are steadily increasing their market share in critical equipment areas such as etching, thin film deposition, and cleaning, while continuing to increase their research and development investments and improving their product matrix. Long-term growth prospects are clear amidst the trend of domestic substitution. 4. Active performance in the intelligent driving concept The intelligent driving concept showed active performance, with Zhejiang Shibao and Shenzhen Soling Industrial hitting the limit up. Analysis: Guotai-Haitong believes that the intelligent driving sector is advancing in terms of technological iteration and commercialization, with commercialization accelerating. It is recommended to focus on hardware and services related to intelligent driving, such as wire-controlled chassis, intelligent driving domain control, sensors, detection, as well as leading OEMs and algorithm companies with advanced intelligence. Institutional viewpoints: China Securities Co., Ltd.: The current market differentiation is superficial, whereas the change in style is essential The current market differentiation is superficial, whereas the change in style is essential. The medium-term rebound trend remains unchanged, with consolidation indicating a build-up of strength. Future funds are likely to continue focusing on the semiconductor and AI sectors, while high-growth themes may experience adjustment pressures. In terms of operations, short-term trading needs to increase the frequency of band trading. It is recommended to avoid realizing profits in high positions and to establish positions in semiconductor, advanced packaging, AI equipment, and other certainty themes during a pullback. Seize structural opportunities, but be mindful of position control and avoid being too heavy. Galaxy Securities: The short-term financial sector will show oscillatory recovery and structural differentiation According to the research report from Galaxy Securities, the financial sector is currently in a relatively low valuation, low allocation of funds, and weak trading volume in the region of the relative bottom area, with sufficient safety margin but lacking comprehensive explosive power in the short term. Positive catalysts coexist with potential risks. In the short term, the financial sector will present an oscillatory recovery and structural differentiation pattern, and a trend-based upward market still needs time. Looking at the medium term, the sector is expected to gradually accumulate recovery momentum, the beta attributes of the sector are undergoing structural repricing, and sub-sectors and quality leaders are likely to see opportunities for recovery. Huatai: Silicon photonics technology is expected to become the new growth pole, focusing on development opportunities in semiconductor foundry companies According to the research report from Huatai, an analysis of the performance of 16 major global semiconductor foundry and packaging companies in the first quarter of 2026 noticed that to meet the rapidly growing demand for AI chips, leading semiconductor manufacturers such as TSMC, Samsung, Hynix, Micron, among others, are ramping up their equipment investments and adjusting their supply chain strategies to cooperate more intensively with industry chain companies in mature process foundry and advanced packaging. "Silicon photonics" is set to become a new growth point for foundry companies. Optical interconnection is crucial for solving the high-speed data transmission bottleneck within AI clusters and is driving silicon photonics from the introduction phase to mass production. Huatai forecasts a year-on-year capital spending growth of 32% to $227.2 billion in the global semiconductor industry in 2026, with WFE (wafer manufacturing equipment) revenue expected to grow by 27% to $165 billion. This article is reprinted from "Tencent Stock Selection", GMTEight Editor: Wang Qiujia.