Brokerage Morning Meeting Highlights | Coexistence of Valuation Recovery and Catalytic Space in Power Grid Equipment

Yesterday, the market rebounded amid fluctuations, with the ChiNext Index leading the gains. The total trading volume in the Shanghai and Shenzhen stock markets reached 2.21 trillion yuan. In terms of sectors, concepts such as computing power leasing, CPO, PCB, semiconductor equipment, AI applications, and CRO performed actively. On the downside, the large financial sector saw a volatile decline, with the "Big Four" banksIndustrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bankeach falling over 3%. By the close, the Shanghai Composite Index rose by 0.33%, the Shenzhen Component Index increased by 3.25%, and the ChiNext Index surged by 5.64%. In today's brokerage morning meeting, Huatai stated that there is both valuation repair and catalytic space for power grid equipment; China Securities Co., Ltd. noted that global semiconductor equipment has entered a volume and price rise channel, and the process of domestic equipment going overseas is accelerating; CICC commented that the gaming industry is entering a new cycle narrative. Huatai: Valuation repair and catalytic space coexist for power grid equipment The power grid equipment sector previously enjoyed a high boom from exports to overseas markets and the implementation of the domestic "14th Five-Year Plan" investment of 4 trillion yuan, leading to continuous upward revisions in market performance expectations and valuation pricing. This peaked in early March this year. Subsequently, due to the Middle East conflict, changes in market style, and pressure on sector performance, it entered a period of sustained adjustment. Currently, the market's performance expectations for the second quarter reports are relatively fully priced in, and the overall valuation of the sector is at a low level. It is emphasized again that the medium to long-term logic for the export of power grid equipment remains robust, with good performance in enterprise orders, and some targets are expected to accelerate breakthroughs in overseas markets. At the same time, the second quarter report performance and mid-term orders for domestic main network targets show strong support; thus, the sector's overall valuation repair and catalytic space coexist. China Securities Co., Ltd.: Global semiconductor equipment enters volume and price rise channel, domestic equipment's overseas process accelerates The global semiconductor equipment industry continues to see an upward adjustment in prosperity, with overseas equipment and components already experiencing a situation of volume and price rise. Overseas delivery times have significantly extended, and domestic equipment and components have improved significantly in capability during the 14th Five-Year Plan period, possessing ample potential for overseas expansion. Additionally, apart from external sanctions, global shortages have further increased domestic downstream customers' difficulty in acquiring overseas equipment and components, leading to an optimistic outlook on the acceleration of domestic market substitution by domestic products. CICC: Gaming industry welcomes new cycle narrative Recently, multiple gaming industry forums (focusing on AI technological innovation, overseas expansion, casual games, etc.) and the offline gaming exhibition ChinaJoy have been held, with industry data for the first half of 2026 published. In the short term, sector valuations are at a relative low in the last decade, and the market has adequately priced in the valley of the product cycle. The release of product cycles in the second half of 2026 and beyond is expected to become a more significant catalyst for valuation repair, with overseas expansion and AI as two long-term tracks providing continuous narrative support for valuation restructuring. This article is reproduced from Caixin News, edited by GMTEight: Chen Siyu.