A-share Pre-market Briefing | Nasdaq rises 0.83%; brokerage wins RMB34 billion bid; electronic cloth prices increase

Pre-market Briefing 1. The three major U.S. stock indices closed mixed, with the Nasdaq up 0.83% and the Philadelphia Semiconductor Index up 2.64% Type: Market Sentiment impact: Neutral The three major U.S. stock indices closed mixed on November 3, with the Nasdaq up 0.83% and the Philadelphia Semiconductor Index up 2.64%. Chip stocks led gains, with SanDisk up more than 4%, Broadcom and AMD up more than 3%, and Western Digital, ARM, Nvidia, and Seagate Technology up more than 2%. Apple fell 1.97%; its CEO Ternus said at the earnings call that rising memory prices are dragging down gross margin sequentially in the new quarter and that memory costs are expected to be higher in the future. 2. The central bank's RMB100 billion swap facility operation landed, with 31 institutions bidding; brokerages have disclosed winning bids exceeding RMB34 billion Type: Macro Sentiment impact: Positive The central bank conducted its third Securities, Funds, and Insurance Companies Swap Facility (SFISF) operation on November 3, in the amount of RMB100 billion, with 31 securities and fund companies participating in the bidding and a winning rate of 10bp. Guotai Haitong and CITIC SEC each won RMB10 billion, Guotou Securities won RMB6 billion, Soochow won RMB5 billion, and GF SEC, Orient, CMSC, Guosen, Ping An Securities, China Great Wall, Guolian Minsheng, and Huafu Securities also announced winning bids. The few that have disclosed amounts alone total more than RMB34 billion in winning bids, and all said the quotas will be used to increase holdings of stocks and stock ETFs. 3. Electronic cloth price increases for November implemented, mainstream thick cloth quotes up RMB1.5/meter month-on-month, industry chain says capacity is fully utilized Type: Industry Sentiment impact: Positive Sublime China Information's November electronic yarn and electronic cloth prices show that mainstream 7628 thick cloth is quoted at RMB14.6/meter to RMB14.65/meter, up RMB1.5/meter month-on-month; 2116 thin cloth is quoted at RMB20.2/meter, up RMB2.5/meter month-on-month. On the electronic yarn side, E225 yarn is quoted at RMB71,500/ton, up RMB10,500/ton to RMB12,500/ton month-on-month; D450 yarn is quoted at RMB147,500/ton, up RMB27,750/ton month-on-month. Several leading listed electronic cloth companies responded that electronic cloth and electronic yarn are priced according to market conditions, November remains in an upward channel, existing capacity is fully utilized, and new industry capacity will basically be gradually implemented only in the second half of 2027. 4. Zhongji Innolight: The vast majority of customers have not cut demand or orders; 2027 orders already cover the full year Type: Company Sentiment impact: Positive Zhongji Innolight released an investor relations activity record on November 3, clarifying rumors that overseas customers were cutting demand or orders: the vast majority of customers have not cut demand or orders, a small number of customers have product structural adjustments, and some customers' 1.6T demand has increased compared with before. Even considering the structural adjustments of a small number of customers, overall industry demand in 2027 remains within the original forecast range. The company's orders for the vast majority of 2027 already cover the full year, at least one key customer has provided clear demand guidance for 2028, data center customers are currently taking delivery at a normal pace, and optical module supply overall remains tight. Investment Calendar November 4November 5: Huawei China Government and Enterprise All-Optical Industry Summit 2026 held in Beijing Institutional Views 1. Guotai Haitong: The equity market in November is expected to be dominated by range-bound repair; confirmation of the market bottom still requires the leading decliners to stop falling and capital to return. 2. Huayuan Research: The core contradiction in AI is not weakening demand, but the time gap between capital expenditure expansion and the realization of commercial returns. 3. EB SECURITIES: The swap facility's expanded capacity and reduced fees, and the conversion of buyback relending into a long-term arrangement, further lower the cost of financing for market entry. Positive/Negative Outlook 1. Qualcomm to report fiscal 2026 fourth-quarter and full-year results on November 4 Type: Market hot topic Guotai Haitong: A systemic rally in the technology sector still requires four types of catalysts, including continued upward revisions to overseas cloud vendors' capital expenditure and stabilization of free cash flow and capital return expectations. 2. U.S. October ADP employment figures to be released on November 4 Type: Institutional hot comment Huayuan Research: A decline in U.S. Treasury yields does not necessarily mean improved risk appetite; attention still needs to be paid to Federal Reserve policy expectations and the returns on technology giants' capital expenditure. 3. The 24th China Semiconductor Packaging and Testing Technology and Market Annual Conference to be held in Nanjing on November 46 Type: Institutional hot comment Zhongtai: The PTFE solution has a relatively high probability of being adopted first in Rubin Ultra NVL576, and large-scale implementation will drive demand release for spherical silica powder, hydrocarbon resin, and PTFE resin. Announcement Briefs Positive announcements 1. Changgao Electric Group: Four wholly owned subsidiaries won a combined RMB230 million in State Grid procurement projects, accounting for 13.84% of 2025 revenue 2. Yoozoo Interactive: A wholly owned subsidiary signed a RMB4.225 billion GPU product procurement contract 3. CXMT Corporation: The chairman proposed increasing the buyback amount from RMB1 billionRMB2 billion to RMB2.5 billionRMB5 billion Negative announcements 1. Shanying International Holdings: Actual controller and chairman Wu Mingwu was placed under CSRC investigation on suspicion of insider trading and short-swing trading 2. Zhejiang Three Stars New Materials: Placed under CSRC investigation on suspicion of information disclosure violations 3. Jiangsu Tongguang Electronic Wire&Cable: Wholly owned subsidiary Tongguang Optical Cable was suspended from bidding eligibility for all categories by State Grid Tianjin for 2 years for providing false materials Overseas Markets The three major U.S. stock indices closed mixed on November 3, with the Dow down 0.38%, the Nasdaq up 0.83%, and the S&P 500 up 0.36%. Rising memory chip prices lifted the semiconductor sector, with the Philadelphia Semiconductor Index up 2.64%, SanDisk up more than 4%, Broadcom and AMD up more than 3%, Microsoft up 2.70%, and Nvidia up 2.26%; the same factor weighed on downstream hardware, with Apple down 1.97% after saying memory price increases dragged on gross margin guidance, and Tesla down 1.32%. The Livermore China Concept Stock Leaders Index closed down 0.08%, with Silicon Motion Technology up more than 7% and JD.com up more than 2%.