A-shares at noon | Shanghai Composite Index up 0.32%, ChiNext Index up 1.73%, CPO concept strengthens

On August 12, the three major A-share indexes opened lower collectively before fluctuating upwards, with the ChiNext Index leading the gains. The market showed a pattern of "indexes opening low and rising high, more stocks advancing than declining, and active performance in the technology and growth sectors." By the noon close, the Shanghai Composite Index rose 0.32% to 3946.51 points; the Shenzhen Component Index rose 1.25% to 14438.07 points; and the ChiNext Index gained 1.73% to 3610.65 points. The Sci-Tech Innovation 50 Index surged 2.09% to 1745.15 points, while the BSE 50 increased by 0.27% to 1116.26 points. In the overall market, 3694 stocks rose, 1610 fell, with 74 hitting the daily limit up and no stocks hitting the limit down, indicating a trend of more gains than losses. The half-day trading volume in the Shanghai and Shenzhen stock markets was about 1.3819 trillion yuan, a decrease of approximately 137.5 billion yuan compared to the previous trading day. Market Overview In terms of gains, sectors related to AI computing power hardware, such as CPOs, optical communication, and optical chips, experienced a significant surge, with many stocks in these sectors hitting the daily limit up. The laser industry and lidar technology also followed suit, gaining strength. The concept of computing power leasing was actively traded, with Shanghai CDXJ Digital Technology and INESA Intelligent Tech Inc. hitting the daily limit up; innovative drugs and CROs continued their strong performance, with Xinjiang Bai Hua Cun Pharma Tech achieving seven consecutive limit ups; sectors such as semiconductors, communication equipment, and electronic chemicals also saw significant gains. On the downside, traditional heavyweight sectors like coal, oil and petrochemicals, and banking performed poorly, with concept sectors such as poultry and fentanyl showing the largest declines. Overall, influenced by the overnight earnings report from Lumentum, a leader in optical communication in the U.S. stock market, which exceeded expectations, and the intensive rollout of industrial policies in Shanghai, funds have concentrated on AI computing power hardware and innovative drugs. Traditional cyclical and defensive sectors witnessed capital outflow. According to data from Financial Associated Press, key funds saw a net inflow into sectors such as communication (over 7.5 billion yuan), electronics, and semiconductors, while there was a net outflow from pharmaceuticals, construction, and bioproducts. Hot Sectors 1. CPO/Optical Communication Concept Surges The concepts of CPOs, optical communication, and optical chips significantly strengthened in the morning session, with Shenzhen Zesum Technology hitting the daily limit up, followed by Jiangsu Etern and Tongding Interconnection Information also hitting the limit up, Suzhou TFC Optical Communication rising over 8%, Henan Shijia Photons Technology increasing over 8%, T&S Communications up over 7%, Advanced Fiber Resources up over 6%, and Eoptolink Technology Inc. and Zhongji Innolight rising over 3%. Commentary: On the news front, overnight (August 11), Lumentum, a leader in optical communication, announced its earnings for the fourth quarter of fiscal year 2026 after market hours, reporting revenue of 1.01 billion USD, a 109% year-on-year increase that surpassed market expectations of 988 million USD; adjusted EPS of 3.23 USD, a 267% year-on-year rise, exceeding the anticipated 2.97 USD; and a non-GAAP gross margin rising to 50.4%. The company also provided revenue guidance for the first quarter of fiscal year 2027, estimating 1.23 to 1.28 billion USD, about 8% higher than market expectations. The CEO stated that the demand for ultra-high-power CPO lasers is growing and that ELS modules have received initial orders, indicating that optical technology is beginning to penetrate into rack-level connectivity. This earnings report further validates the trend that the AI computing power bottleneck is spilling over from GPUs to high-speed optical interconnections. 2. Active Trading in Computing Power Leasing Concept The computing power leasing concept strengthened in the morning session, with Shanghai CDXJ Digital Technology and INESA Intelligent Tech Inc. both hitting the daily limit up, alongside stocks like Glory View Technology, RunJian Co.,Ltd., Shijihengtong Technology, and Sharetronic Data Technology following suit. Commentary: On the news front, on August 11, the Shanghai Municipal Economic and Information Technology Commission issued the "14th Five-Year Plan for the Development of Software and Information Services in Shanghai," proposing the goal of reaching an industry scale of 4 trillion yuan and value-added exceeding 1.1 trillion yuan by 2030. The plan explicitly implements the "hundred-thousand" intelligent computing cluster project, aiming to build super-large-scale intelligent computing clusters of 100,000 cards in regions such as Songjiang, Lingang, and Qingpu. Furthermore, according to data from the China Academy of Information and Communications Technology, the domestic computing power leasing market is expected to reach 68 billion yuan in the first quarter of 2026, a year-on-year increase of 62%, anticipating a total exceeding 260 billion yuan for the whole year. 3. Innovative Drug Concept Continues Strong Performance The innovative drug and CRO sectors remained active in the morning session, with Xinjiang Bai Hua Cun Pharma Tech achieving seven consecutive limit ups, Anhui Wanbang Pharmaceutical Technology rising over 10%, Harbin Gloria Pharmaceuticals increasing over 6%, while stocks like Harbin Pharmaceutical Group, Shanghai Medicilon Inc., and Hangzhou Bio-Sincerity Pharma-Tech followed with gains. Commentary: On the news front, on August 10, the Shanghai Municipal Commission of Commerce and six other departments issued the "Construction Plan for Shanghai's National Service Trade Innovation Development Demonstration Zone," highlighting support for the innovative development of the biopharmaceutical industry, and backing companies in the global registration and certification of innovative drugs, modern traditional Chinese medicine, and high-end medical devices for local sales. Additionally, overseas multinational corporations (MNCs) and CXOs continue to report earnings that exceed expectations, providing emotional support for the sector. It should be noted that Xinjiang Bai Hua Cun Pharma Tech announced on the evening of August 11 that the company is primarily focused on R&D of small molecule chemical generics and does not engage in innovative drug development, with Q1 revenue down 30.68% year-on-year and net profit attributable to the parent company down 67.94%. The company's latest rolling P/E ratio stands at 184.25 times, significantly higher than the industry average of 34.96 times, posing a risk of irrational speculation.