A-share Midday Review | Shanghai Composite Index rises 0.10%, solar sector sees wave of limit-up stocks, high-dividend sectors weaken

On November 5, the three major A-share indices opened collectively lower. The Shanghai Composite Index opened down 1.07% at 3,646.57 points, the Shenzhen Component Index opened down 1.05%, the ChiNext Index opened down 2.00%, and the STAR 50 opened down 2.33%. After the open, the indices rebounded unilaterally and all turned positive. The ChiNext Index rose more than 3% at one point during the session, and the STAR 50 rose more than 5% at one point. Gains narrowed somewhat approaching midday, with the market showing a pattern of "opening low and moving higher, growth leading, high dividends pulling back." As of the midday close, the Shanghai Composite Index rose 0.10% to 3,689.79 points, the Shenzhen Component Index rose 1.44%, and the ChiNext Index rose 1.24%; the STAR 50 rose 2.11%, and the BSE 50 rose 2.10%. More than 4,700 stocks in the overall market rose, while fewer than 700 declined. Half-day turnover across the Shanghai, Shenzhen, and Beijing markets totaled RMB1.48 trillion, an increase of RMB545.3 billion from the previous trading day. On the capital flow side, Cailian Press market monitoring data showed that in the morning session, main funds recorded net inflows into the power equipment/new energy, semiconductors, and electronics sectors, and net outflows from telecommunications, non-bank financials, and coal mining sectors, with the power equipment/new energy sector seeing net inflows exceeding RMB6.9 billion. At the individual stock level, Contemporary Amperex Technology led with net buying exceeding RMB900 million, while CXMT Corporation saw net selling exceeding RMB1.2 billion. On the policy front, the People's Bank of China announced on November 4 a 0.25 percentage point cut to the relending rate for stock buybacks and increased holdings, to 1%, effective November 4; the support targets are 21 nationwide banks and 5 systemically important city commercial banks, with a 100% support ratio and a term of 1 year, extendable as needed by banks; after the November 2 symposium, banks had submitted quota applications to the PBOC exceeding RMB200 billion. Market Overview On the board, photovoltaic equipment, precious metals, and battery sectors led gains, while power equipment and consumer electronics also strengthened; on the downside, telecom operators, coal mining, oil and gas extraction, banks, and expressways led declines. Overall, the overnight plunge in international oil prices weighed on oil and petrochemical heavyweights, high-dividend names generally pulled back, and the Shanghai Composite Index lagged the Shenzhen market noticeably due to heavyweight drag; capital flowed clearly into growth sectors such as power equipment/new energy, and more stocks rose than fell. Hot Sectors 1. Photovoltaic equipment sector sees wave of limit-up stocks The photovoltaic equipment sector rose 9.38%. Gansu Golden Solar, Suzhou Betely Polymer Materials, and Changzhou Shichuang Energy hit the 20% limit-up, YOULIZHINENG hit the 30% limit-up, Hainan Drinda New Energy Technology, Hongyuan Green Energy, Cybrid Technologies Inc., GCL System Integration Technology, and Hangzhou First Applied Material hit the limit-up, Suzhou Maxwell Technologies touched the 20% limit-up intraday and was up more than 16% at midday, Wuxi Autowell Technology Co., Ltd. rose more than 15%, LAPLACE Renewable Energy Technology and Changzhou Fusion New Material rose more than 12%, Jiangsu Goodwe Power Supply Technology Co.,Ltd. rose more than 10%, Shenzhen S.C New Energy Technology Corporation rose nearly 10%, and Sungrow Power Supply rose more than 7%. Comment: On the news front, National Energy Administration data released on October 26 on national power statistics for January-September showed that new photovoltaic installations in September alone totaled 13.64GW, up 41.2% year-on-year and up 23.6% month-on-month, marking the third consecutive month of year-on-year growth (July and August single-month new installations grew 28% and 50% year-on-year, respectively); cumulative new photovoltaic installations for January-September totaled 110.83GW, down 53.9% year-on-year; as of the end of September, national CECEP Solar Energy installed capacity was 1.31 billion kilowatts, up 16.5% year-on-year. Overnight overseas, according to Xinhua News Agency, multiple mainstream U.S. media outlets predicted that Democrats would win big in the midterm elections, and the market expects them to push for a shift in energy policy; U.S. renewable energy stocks rose significantly on the 4th. Separately, according to Baiinfo data, domestic polysilicon production in November is expected to be 87,200 tons, a decrease of about 9,700 tons, or about 10%, from 96,900 tons in October, and the industry operating rate is expected to remain at around 31%. 2. Precious metals sector extends gains The precious metals sector rose 5.70%, of which silver rose 7.71% and gold rose 5.10%. Shenzhen China Bicycle hit the limit-up at the open and recorded a second consecutive limit-up, Shengda Resources hit the limit-up and recorded a second consecutive limit-up, Inner Mongolia Xingye Silver&Tin Mining and Chifeng Jilong Gold Mining touched the limit-up intraday and were each up more than 8% at midday, Shandong Gold Mining rose more than 5%, Zhongjin Gold Corp.,Ltd rose more than 3%, and Zijin Mining Group rose more than 1%. Comment: On the news front, after the U.S. midterm election results became clear, the dollar and U.S. Treasury yields fell in tandem. On November 4, COMEX gold futures rose 3.34% to US$4,072.2/oz, returning above US$4,000, and COMEX silver futures rose 5.17% to US$52.33/oz; during Asian trading on November 5, spot gold further broke through US$4,100/oz. COMEX silver futures rose more than gold futures, and the A-share silver sector also rose more than the gold sector. 3. Battery and lithium mining sectors strengthen The battery sector rose 4.42%, and the lithium battery sector rose 4.52%. Guangzhou Great Power Energy & Technology touched the 20% limit-up intraday and was up more than 13% at midday, Jiangsu HSC New Energy Materials rose more than 12%, Guangdong Lyric Robot Automation and SolaX Power Network Technology rose more than 10%, Canmax Technologies, YOUNGY Co.,Ltd., and Pylon Technologies rose more than 7%, Chengxin Lithium Group and Ganfeng Lithium Group rose more than 6%, and Contemporary Amperex Technology rose more than 5%; Jiangsu Dingsheng New Materials Joint-Stock hit the limit-up. Comment: On the news front, on November 5 the GFEX lithium carbonate main contract extended its intraday gain to 6%, to RMB93,680/ton; on the same day, Mysteel data showed that the MMLC battery-grade lithium carbonate morning midpoint price was RMB91,850/ton, down RMB950/ton from the previous trading day, showing divergence between futures and spot prices. On the industry side, Contemporary Amperex Technology announced on November 2 that it had delivered its first batch of EnerQB long-duration energy storage systems to global energy infrastructure investment institution Quinbrook, with each unit having a capacity of 5.64MWh, designed for a 3GW/24GWh series of long-duration energy storage projects in Australia. 4. High-dividend sectors such as oil and coal pull back collectively The telecom operators sector fell 1.98%, the coal mining sector fell 1.84%, the oil and gas extraction sector fell 1.47%, the banking sector fell 1.16%, and the expressway sector fell 1.15%. PetroChina fell nearly 7%, China Shenhua Energy and Yankuang Energy Group fell more than 6%, China Coal Energy fell more than 5%, Shaanxi Coal Industry fell nearly 4%, China Telecom Corporation fell more than 3%, Postal Savings Bank Of China fell more than 2%, and China Mobile Limited fell more than 1%. Comment: On the news front, international oil prices fell sharply on November 4. Light crude futures for December delivery on the New York Mercantile Exchange fell 8.29% to US$88.12/barrel, and Brent crude futures for January delivery in London fell 8.67% to US$94.62/barrel, as the market bet on a de-escalation of Middle East tensions; on the same day, the S&P 500 energy sector fell 4.77%, the weakest performer among the 11 major sectors. Cailian Press market monitoring data showed that in the morning session, main funds recorded net outflows from coal mining, telecommunications, and non-bank financials sectors, and net inflows into the power equipment/new energy sector exceeding RMB6.9 billion.