Midday Review of A-shares | What happened? A-shares experienced a "sharp V" reversal, with the ChiNext Index rising more than 1% in the first half of the day.

What happened? Global market risk sentiment improved, the three major indexes of A shares rose together, and the Sci-Tech Innovation 50 index surged more than 3%, leading the market! The latest news shows that, according to Xinhua News Agency citing the Washington Post on the 24th, the United States and Iran have reached an agreement on a framework for a memorandum of understanding. Once signed, shipping in the Strait of Hormuz will be fully restored within 30 days. On May 25, the warm wind from the external markets directly boosted the opening sentiment of A shares, with the three major indexes collectively opening nearly 1% higher. However, A shares have always had the inertia of "opening high and then falling", with short-term profit-takers cashing in on the high opening, causing the indexes to quickly retreat. However, AI computing power, semiconductors, and electronics (MLCC/PCB) main themes showed strong resilience during the pullback, with the Sci-Tech Innovation 50 index surging over 3% to lead the market. By the midday close, the Shanghai Composite Index rose 0.57%, the Shenzhen Component Index rose 0.87%, and the ChiNext Index rose 1.14%. The total turnover of the Shanghai and Shenzhen stock markets in the morning session was 2.08 trillion yuan, an increase of 299.9 billion yuan from the previous trading day. In terms of sectors, the semiconductor industry chain, including MLCC, advanced packaging, IGBT, analog chips, and CPUs, all surged, with many stocks like Shanluo Electronics and Dosilicon Co., Ltd. hitting the limit up; the storage chip concept continued to strengthen, with stocks like Bomin Electronics hitting the limit up; green energy and power concept stocks rose, with many stocks such as Huadian Energy and Beijing Jingneng Power hitting the limit up; coal stocks rose, with Pingdingshan Tianan Coal. MiningCo., Ltd. hitting the limit up; liquor concept stocks rebounded, with Jinhui Liquor and Gansu Huangtai Wine-Marketing Industry hitting the limit up; the computing hardware concepts of light modules, MicroLED, and PCB continued to show strength, with many stocks like Jiangsu Changhai Composite Materials and Avary Holding hitting the limit up. In terms of declines, the lithium battery concept stocks such as lithium hexafluorophosphate, electrolyte, and lithium-ion battery membranes all fell, with Tonze New Energy Technology hitting the limit down; the oil and gas industry chain declined, with stocks like Tong Petrotech Corp. and Sino Geophysical falling by more than 9%; the hydrofluoric acid concept stocks pulled back; Xin Duoduo concept stocks collectively fell, with Beijing Qianjing Landscape hitting the limit down; the AI marketing, KNOWLEDGE ATLASAI, AIGC, and AI film and television application industry chains all fell, with stocks like Three's and China Bester Group Telecom hitting the limit down; the computing power localization concept retreated, with Glory View Technology falling by more than 10%; innovative drugs, weight loss drugs, AI medicine, and other pharmaceutical concepts continued to show weakness, with Zhejiang Anglikang Pharmaceutical hitting the limit down; dye, phosphorus chemical, methanol, and other chemical concepts all declined. Looking ahead, Huaxi believes that the market has solid support in the bottom range when viewed from the three dimensions of micro liquidity, global industrial trends, and stable expectations of policies. Hot sectors 1. The collective outbreak of the chip industry chain The chip industry chain collectively exploded, with the semiconductor equipment sector shaking and rebounding, with ACM Research rising by over 10% and Suzhou HYC Technology20cm hitting the limit up. Review: On the news front, on May 25, at the International Symposium on Circuits and Systems (ISCAS 2026), Huawei's director and president of the Semiconductor Business Department, He Tingbo, stated that the Kirin smartphone chip to be released this autumn will be the first to adopt logic folding technology, resulting in a significant performance increase. 2. The repeated activation of the superhard materials concept The superhard materials concept was repeatedly active, with Henan Huanghe Whirlwind, HuNan Boyun New Materials, and Henglin Home Furnishings hitting the limit up, while HFZS, Sf Diamond Co., Ltd., and Henan Liliang Diamond followed suit. Review: On the news front, diamond-copper composite materials have recently been scaled up for application at the Zhengzhou Supercomputing Center, increasing the heat transfer capacity of chip modules by 80%, improving chip performance by 10%, and reducing temperatures by 5C. 3. The continued strength of the computing power hardware concept The computing power hardware concepts such as light modules, MicroLED, and PCB continued to show strength, with stocks like Jiangsu Changhai Composite Materials and Avary Holding hitting the limit up. Review: According to LightCounting's forecast, the market size of 100G and above pluggable optical modules is expected to increase from nearly $20 billion in 2025 to over $50 billion in 2030, with the CPO market size expected to reach $10 billion in 2030. 4. Rebound of liquor concept stocks Liquor concept stocks rebounded, with Jinhui Liquor and Gansu Huangtai Wine-Marketing Industry hitting the limit up. Review: Dongxing pointed out that with the gradual easing of policy pressure and the catalysis of consumption expansion policies, demand is expected to gradually recover. The industry is currently at a low valuation, with full pessimistic expectations, a clear direction for industry consolidation, and a clearer bottom. Institutional Perspectives Huaxi: The bottom range of the market has solid support Since mid-May, A shares have faced resistance from two main sources: overseas liquidity suppression, and the continued congestion of micro trading structures in the technology sector. Although non-technology sectors have repeatedly tried to attract funds, they have been constrained by the weak domestic demand fundamentals and have not been able to become the direction of the combined force of funds. Huaxi believes that the current adjustment belongs to the stage of phase accumulation in a strong structural market, combined with continuous regulatory efforts to prevent risks and strengthen supervision, which helps to digest overheated sentiment and solidify the foundation for a healthy and sustainable upward trend. When viewed from the three dimensions of micro liquidity, global industrial trends, and stable expectations of policies, the bottom range of the market has solid support. Open Securities: Digestion after microstructure congestion, but the bull market is not over In recent periods, the market has experienced continuous adjustments, with core concerns coming from microstructure congestion. Reviewing several typical high-congestion phases in history, a worsening microstructure often corresponds to increased short-term market volatility but does not necessarily mean the end of the bull market. Open Securities believes that the bigger probability is not "technology retreat", but internal switching within technology, as well as the diffusion of growth styles to more "second ignition" assets. The current microstructure is approaching a sensitive zone, fundamentally acting as a catalyst for the market entering the third stage of the bull market. Bull one buys recovery, bull two buys reappraisal, bull three buys ignition. After entering the third stage of the bull market, the market no longer rewards elastic assets indiscriminately, but begins to select directions that truly have profit realization and accelerating economic activity. The core of "second ignition" assets lies in having both high economic levels and a slope that continues to improve. In other words, the market is transitioning from "buying recovery" to gradually moving towards "buying growth, buying growth rate change". China Securities Co., Ltd.: Optimistic about the AI industry chain and computing power network construction A research report from China Securities Co., Ltd. pointed out that Nvidia released its FY27Q1 results, which exceeded market expectations. Customer demand has gradually shifted from simple GPU procurement to a full-stack system including switches and interconnections. It is expected that the Vera Rubin cabinet product will be mass delivered from the third quarter, with the value of the CPU, interconnection, exchange, and other links simultaneously increasing, and future AI infrastructure upgrades will focus on the whole process. The computing power network is positioned as a national-level infrastructure, with annual construction investment expected to exceed trillions, covering multiple aspects such as computing power construction, management, dispatching, and operation. Operators, as the main force in the construction of the computing power network, have introduced token packages and are exploring token operations for consumer landing. Google I/O 2026 showed that Google's AI industry layout has entered a full-stack stage of "computing power infrastructure + model + application entry + end-side device" - TPU 8t/8i verification training and inference computing power demand is expected to increase in the long term, while Gemini 3.5 Flash and Gemini Omni strengthen model speed, cost, and multimodal capabilities.